EVTC — EVERTEC, Inc.

Summary of EVERTEC, Inc. Q1 2026 Earnings Call

1. Key Financial Results and Metrics

• Revenue: $247.9 million, up 8% year-over-year (YoY), with a constant currency growth of 5%.
• Adjusted EBITDA: Approximately $97 million, a 9% increase YoY, maintaining a margin of 39.1%.
• Adjusted EPS: $0.90, reflecting a 3% increase YoY.
• Dividends and Share Repurchases: $3.1 million in dividends paid and $20 million spent on repurchasing approximately 700,000 shares.
• Liquidity: Approximately $460 million as of March 31, 2026.
• Net Debt: $826.2 million, with a net debt to trailing twelve months adjusted EBITDA ratio of 2.15 times.

2. Strategic Updates and Business Highlights

• M&A Activity: Successfully closed the acquisition of DIMENSA, enhancing EVERTEC's position in the financial SaaS market. The integration is expected to be neutral to slightly accretive in 2026, with synergies anticipated to begin in 2027.
• Performance in Latin America: Revenue increased by 32% YoY, driven by the Tecnobank acquisition and organic growth. The company is seeing strong performance in Brazil, supported by favorable foreign exchange conditions.
• Operational Efficiency: Continued focus on cost management and operational efficiency helped maintain EBITDA margins despite headwinds from discounts and foreign exchange impacts.

3. Forward Guidance and Outlook

• 2026 Revenue Guidance: Expected to be between $1.073 billion and $1.085 billion, representing a growth of 15.1% to 16.4% YoY, with a constant currency growth expectation of 13.8% to 15%.
• Adjusted EPS Guidance: Anticipated growth between 6.6% and 9.9% from the $3.62 reported for 2025.
• Segment Outlook:
  • Merchant Acquiring: Mid-single-digit growth expected.
  • Payments Puerto Rico: Mid-single-digit growth driven by ATH Móvil and POS volume.
  • Latin America Payments and Solutions: High 30s growth reported, mid-30s on a constant currency basis.
  • Business Solutions: Expected to decline in the low- to mid-single digits.

4. Bad News, Challenges, or Points of Concern

• Business Solutions Decline: Revenue decreased by 9% YoY, primarily due to a 10% discount to Popular and a one-time sale in the prior year.
• Foreign Exchange Headwinds: Higher-than-anticipated unfavorable foreign exchange dynamics impacted costs, particularly in Uruguay and Costa Rica.
• Integration Risks: The success of the DIMENSA acquisition hinges on effective integration and realization of anticipated synergies, which are not expected to materialize until 2027.

5. Notable Q&A Insights

• DIMENSA Contribution: Management indicated that while they cannot break out specific contributions from DIMENSA for 2026, they expect it to be neutral to slightly accretive, with significant synergies anticipated in future years.
• Inflation Impact: Management noted that inflation could have mixed effects, with potential revenue increases from higher transaction volumes, but also cost pressures that need to be managed.
• AI Integration: Management expressed optimism about AI's role in enhancing operational efficiency and product quality, viewing it as a potential growth catalyst rather than a competitive threat.
• Pipeline Conversion: The company maintains a strong organic pipeline, with optimism for continued customer wins throughout the year.

Overall, EVERTEC demonstrated solid financial performance in Q1 2026, supported by strategic acquisitions and operational efficiencies, while also navigating challenges related to foreign exchange and specific segment declines. The outlook for the year remains positive, with increased revenue guidance reflecting confidence in both existing operations and new acquisitions.