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EI

EVERTEC, Inc. (EVTC)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered broad-based revenue growth and beat Street estimates: revenue $229.6M vs $222.3M* and adjusted EPS $0.89 vs $0.856*, prompting an outlook raise and an expanded $150M buyback authorization through 2026 .*
  • Constant-currency revenue grew ~10% to $232.9M; adjusted EBITDA rose 8% to $92.6M with a 40.3% margin, modestly below prior-year due to lapping one-time accretive items .
  • Strength in Latin America (15% reported, ~20% cc) and ATH Móvil (revenue +17%) offset merchant acquiring headwinds from lower gas prices; Puerto Rico macro backdrop remained stable .
  • FY2025 guidance raised: GAAP revenue $901–$909M; adjusted EPS $3.44–$3.52; tax 6–7%; capex ~$85M; margin assumption 39.5–40.5% maintained. Constant-currency ranges increased for both revenue and EPS .
  • Stock catalysts: sustained Latin America reacceleration, ATH Móvil adoption, buyback refresh, and continued estimate beats; watch Popular 10% discount impact starting Q4 and Brazil FX sensitivity .

What Went Well and What Went Wrong

What Went Well

  • Latin America growth accelerated: revenue +15% YoY (~20% cc) with margin up ~370 bps aided by GetNet Chile strength, Brazil reacceleration, and MELI attrition at below-average margins improving mix .
  • ATH Móvil momentum: “ATH Móvil revenue grew 17% year over year,” with broader adoption from small into medium and larger businesses, supporting Puerto Rico payments revenue .
  • Guidance raised and capital returns: FY25 revenue and EPS raised; buyback authorization increased and extended to $150M through 12/31/2026. CEO: “We are pleased to announce a strong second quarter of organic revenue growth and, as a result, are raising our full year guidance.” .

What Went Wrong

  • Merchant acquiring faced category headwinds: lower gas prices weighed on sales volume growth despite spread improvements, partially offset by government tax-return related payments .
  • Business Solutions margin down YoY (~750 bps) due to lapping a highly accretive non-recurring project in prior year; sequential trajectory expected to stabilize before Q4 Popular discount impact .
  • FX headwinds, mainly the Brazilian real, pressured reported growth, though outlook incorporates improving FX and provides cc ranges to reflect operational strength .

Financial Results

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Millions)$216.395 $228.792 $229.607
GAAP Diluted EPS ($USD)$0.62 $0.50 $0.62
Adjusted EPS ($USD)$0.87 $0.87 $0.89
Adjusted EBITDA ($USD Millions)$88.610 $89.439 $92.565
Adjusted EBITDA Margin (%)40.9% 39.1% 40.3%
Revenue Consensus Mean ($USD Millions)*$215.290$217.966$222.285
Primary EPS Consensus Mean ($USD)*$0.716$0.796$0.856

Consensus values marked with * are from S&P Global.

Segment Revenues

Segment Revenue ($USD Millions)Q2 2024Q2 2025
Payment Services – Puerto Rico & Caribbean$54.199 $56.421
Latin America Payments & Solutions$74.669 $86.055
Merchant Acquiring, net$45.319 $47.292
Business Solutions$62.336 $64.519
Total Reportable Segments$236.523 $254.287
Corporate & Other($24.545) ($24.680)
Total Revenue$211.978 $229.607

Segment Adjusted EBITDA

Segment Adjusted EBITDA ($USD Millions)Q2 2024Q2 2025
Payment Services – Puerto Rico & Caribbean$31.358 $33.028
Latin America Payments & Solutions$17.500 $23.350
Merchant Acquiring, net$18.248 $20.002
Business Solutions$29.769 $26.032
Total Reportable Segments$96.875 $102.412
Corporate & Other($10.823) ($9.847)
Total Adjusted EBITDA$86.052 $92.565

KPIs

KPIQ2 2025
Net Debt ($USD Millions)$673.6
Weighted Avg Interest Rate~6.55%
Liquidity (incl. borrowing capacity; excl. restricted cash)~$484.5M
Operating Cash Flow (H1 2025)$86.128M
Net Debt / TTM Adjusted EBITDA~1.95x
Buybacks (Q2)101,890 shares; $3.7M at $36.22 avg price

Estimate Comparison and Surprise

  • Q2 2025: Revenue $229.6M vs $222.3M*; Adjusted EPS $0.89 vs $0.856* — significant beat on both.*
  • Q1 2025: Revenue $228.8M vs $218.0M*; Adjusted EPS $0.87 vs $0.796* — beat on both.*
  • Q4 2024: Revenue $216.4M vs $215.3M*; Adjusted EPS $0.87 vs $0.716* — beat on both.*

Consensus values marked with * are from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue (GAAP)FY 2025$889–$897M (Q4 2024 issue) $901–$909M Raised
Revenue (Constant Currency)FY 2025$903–$911M (Q1 update) $911–$919M Raised
Adjusted EPS (GAAP basis)FY 2025$3.34–$3.45 (Q4 2024 issue) $3.44–$3.52 Raised
Adjusted EPS (Constant Currency)FY 2025$3.44–$3.53 (Q1 update) $3.49–$3.57 Raised
Adjusted EBITDA Margin AssumptionFY 2025Prior assumption maintained (noted previously)39.5%–40.5% Maintained
Adjusted Effective Tax RateFY 2025~6%–7% ~6%–7% Maintained
CapexFY 2025~$85M ~$85M Maintained
Segment Growth CommentaryFY 2025N/AMA: mid-single-digit; PR & Caribbean: low–mid single-digit; LATAM: low double-digit (low–mid teens cc); Business Solutions: low single-digit Provided detail
Popular Discount ImpactQ4 2025N/A~10% discount to Popular MSA services; ~$4M impact to revenue and adjusted EBITDA in Q4 New timing clarity
DividendQ3 2025Regular quarterly $0.05 declared May 2 (prior)$0.05 declared July 24; payable Sep 5, record Aug 4 Maintained schedule
Share Repurchase AuthorizationThrough 2026~$134M remaining at YE2024 Increased and extended to $150M through 12/31/2026 Raised/Extended

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024 & Q1 2025)Current Period (Q2 2025)Trend
Latin America momentumQ4: acquisition contributions (Sinqia, Grandata, Nubity) and GetNet Chile catch-up; revenue +11% . Q1: cc revenue +15% overall .Revenue +15% (~20% cc); Brazil reacceleration; GetNet Chile strength; MELI attrition at lower margins improves mix .Improving growth and margin mix
ATH Móvil performanceQ4/Q1: ATH Móvil driving Puerto Rico volume .ATH Móvil revenue +17% YoY; expanding into medium/larger businesses .Strong adoption broadening
Tariffs/macroManagement vigilant; no direct impact identified (Q1) .Continued vigilance; conservatism in guidance low end; no demand impact observed .Stable; risk monitored
Pricing/spread initiativesMA benefited from repricing in 2024; lapping ahead .Spread improvements continue but lapping tailwinds in H2; category mix (gas) a headwind .Normalizing tailwinds
Sinqia integration and modernization2024 integration; acquisition benefits . Q1: cc EPS raised .“Sinqia outperformed our expectation”; tech modernization, repricing, margin optimization underway; multi-year modernization .Ahead of plan
FX (Brazil)FX a headwind; cc ranges provided .Outlook raised partly on FX improvement; cc revenue/EPS ranges increased .Moderating headwind
Capital returnsASR completed in 2024; ~$138M remaining .Buyback authorization refreshed to $150M; dividends maintained .Increased return capacity

Management Commentary

  • CEO on guidance and growth: “We are pleased to announce a strong second quarter of organic revenue growth and, as a result, are raising our full year guidance.”
  • CEO on share repurchases: Board “approved a refresh of our share repurchase program, authorizing the company to repurchase up to an aggregate of $150 million… through December 31, 2026.”
  • CFO on LATAM and margin mix: “Adjusted EBITDA was $23.3 million… margin of 27.1%, up ~370 bps… positive impact to margin from the MELI attrition that was coming in at lower margins than average.”
  • CFO on Puerto Rico: “Revenue… $56.4 million, an increase of approximately 4%… driven by ATH Móvil… 5% POS transaction growth.”
  • CEO on competitive edge: “We have our own technology… customized for customers… and we have a presence in each of these countries… they can count on us to run [with] compliance [and] cybersecurity.”

Q&A Highlights

  • Sinqia trajectory: Management emphasized multi-year tech modernization, repricing of legacy contracts, and margin optimization; Sinqia “outperformed our expectation for the quarter,” with growth back to intended rates .
  • Pipeline and tariffs: Active pipeline across LATAM; no evidence of demand delays due to tariff noise; guidance low end includes conservatism .
  • Category mix in MA: Lower gas prices softened sales volume growth; offset by seasonal government tax-return payments .
  • M&A stance: Balanced pipeline; not focused on another transformational Sinqia-sized deal; expect bolt-on deals across the region, with strong interest in Brazil and Mexico .
  • Outlook mechanics: FY25 margin progression to improve in Q3, then reset lower in Q4 as the Popular discount begins; cc ranges raised on FX improvement .

Estimates Context

  • Q2 2025 beat vs consensus: Revenue $229.6M vs $222.3M*; EPS $0.89 vs $0.856* — upside driven by LATAM strength, ATH Móvil growth, and spread improvements despite category headwinds.*
  • Q1 2025 and Q4 2024 also exceeded Street revenue and EPS, supporting estimate momentum into H2.*
  • Potential estimate revisions: LATAM growth outperformance and sustained ATH Móvil adoption may pull FY25 revenue/EPS estimates higher; expect Q4 margin reset to be incorporated into models starting late Q3.* Values retrieved from S&P Global.

Key Takeaways for Investors

  • The beat-and-raise quarter coupled with a refreshed $150M buyback increases the probability of continued estimate upgrades and supports multiple expansion near-term .
  • Latin America is the growth engine (Brazil recovery, GetNet Chile, Mexico acquisitions), with improving margin mix; monitor FX and MELI churn effects but trend is favorable .
  • ATH Móvil’s 17% revenue growth evidences network effects and cross-merch adoption, bolstering Puerto Rico payments resilience .
  • Watch Q4 Popular 10% discount; management plans cost actions to offset; expect margin cadence: up in Q3, reset in Q4; full-year margin still ~39.5–40.5% .
  • Merchant acquiring spread gains persist, but category mix (gas) and lapping repricing tailwinds temper H2 comps; growth should remain mid-single-digit .
  • Liquidity and leverage are favorable (liquidity ~$484.5M; net debt/TTM adj. EBITDA ~1.95x), enabling disciplined M&A and capital returns .
  • Trade setup: Near-term strength on raised guide and buyback; reassess post-Q3 as Q4 discount effect approaches; medium-term thesis rests on LATAM platform scaling, modernization/ repricing benefits at Sinqia, and ATH Móvil penetration .