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EI

EVERTEC, Inc. (EVTC)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered solid top-line growth and an EPS beat vs consensus: revenue $228.587M (+8% y/y) and Adjusted EPS $0.92 (+7% y/y); S&P Global consensus was $224.680M revenue and $0.889 EPS, implying a beat of ~$3.9M and $0.031 EPS respectively . Estimates marked with () from S&P Global below.
  • Adjusted EBITDA rose to $92.611M (+6% y/y) with margin at 40.5% (down ~80 bps y/y), reflecting strong LatAm momentum and a slight spread compression in Merchant Acquiring; GAAP diluted EPS was $0.51 (+34% y/y) aided by lower D&A, lower interest expense, and a $5.7M tax credit gain .
  • FY 2025 guidance was raised: revenue to $921–$927M (from $901–$909M) and Adjusted EPS to $3.56–$3.62 (from $3.44–$3.52); capex and adjusted tax rate maintained (capex ~$85M; tax 6–7%) .
  • Strategic catalysts: closing of 75% stake in Tecnobank (Brazil), new wins in Chile (Banco de Chile acquiring processing) and Peru (issuing and fraud monitoring), and containment of the PIX incident in Brazil; management indicated no commercial pipeline impact from the incident .

What Went Well and What Went Wrong

What Went Well

  • Latin America delivered 19% revenue growth (18% cc), supported by Brazil re-acceleration and contributions from Grandata/Nubity; wins with Banco de Chile and Financiaria Oh expand footprint and validate strategy. “We have signed a deal to provide acquiring processing… to Banco de Chile… we now have two of the largest banks in Chile on our acquiring platform… [and] a deal with Financiaria Oh in Peru…” .
  • Raised FY 2025 outlook on stronger execution and FX tailwinds: revenue to $921–$927M and Adjusted EPS to $3.56–$3.62; constant currency revenue growth now 10–11% .
  • Strong cash and liquidity: operating cash flow YTD $157.001M; total liquidity $518.6M; net debt/TTM Adjusted EBITDA ~1.8x, below the 2–3x target range low end .

What Went Wrong

  • Adjusted EBITDA margin compressed to 40.5% (–80 bps y/y), driven by prior-year one-time LatAm revenue accretive to margin and mix effects (lower average ticket in Merchant Acquiring) .
  • Cost of revenues increased partly due to estimated liabilities for potential contractual claims tied to the PIX incident, higher software maintenance and cloud costs, and personnel/professional services; spread slightly decreased in Merchant Acquiring as mix shifted to card-present .
  • Business Solutions margin declined ~100 bps y/y on one-time credit and lower-margin hardware sales; noted upcoming headwinds from 10% discount to Popular impacting Q4 and 2026 .

Financial Results

Consolidated Results vs Prior Periods and Estimates

MetricQ3 2024Q2 2025Q3 2025Q3 2025 ConsensusSurprise
Revenue ($USD Millions)$211.795 $229.607 $228.587 $224.680*+$3.907
GAAP Diluted EPS ($)$0.38 $0.62 $0.51 N/AN/A
Adjusted EPS ($)$0.86 $0.89 $0.92 $0.889*+$0.031
Adjusted EBITDA ($USD Millions)$87.389 $92.565 $92.611 N/AN/A
Adjusted EBITDA Margin (%)41.3% 40.3% 40.5% N/AN/A

Estimates marked (*) retrieved from S&P Global.

Segment Breakdown

SegmentQ3 2024 Revenue ($M)Q2 2025 Revenue ($M)Q3 2025 Revenue ($M)Q3 2024 Adj. EBITDA ($M)Q2 2025 Adj. EBITDA ($M)Q3 2025 Adj. EBITDA ($M)
Payment Services – Puerto Rico & Caribbean$52.755 $56.421 $55.244 $28.352 $33.028 $29.874
Latin America Payments and Solutions$76.029 $86.055 $90.378 $20.740 $23.350 $24.426
Merchant Acquiring, net$45.437 $47.292 $46.753 $18.227 $20.002 $18.611
Business Solutions$61.103 $64.519 $61.679 $25.504 $26.032 $25.100
Corporate & Other$(23.529) $(24.680) $(25.467) $(5.434) $(9.847) $(5.400)
Total$211.795 $229.607 $228.587 $87.389 $92.565 $92.611

KPIs

KPIQ3 2024Q2 2025Q3 2025
Operating Cash Flow (YTD, $M)N/A$86.128 $157.001
Net Debt ($M)~N/A~N/A$631.8
Liquidity ($M)~N/A~N/A$518.6
Weighted Avg Interest Rate (%)~N/A~N/A6.24%
Capex (YTD, $M)N/A$42.680 (cash investing outflows) $67.9 (company commentary)
Dividends/Buybacks (YTD)N/ABuybacks: $3.691M Dividends $9.6M; Buybacks $3.7M
Quarterly Dividend DeclaredN/AN/A$0.05 per share (paid Dec 5, 2025)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue (GAAP)FY 2025$901–$909M $921–$927M Raised
Revenue (Constant Currency)FY 20257.8–8.7% growth 10–11% growth Raised
Adjusted EPSFY 2025$3.44–$3.52 $3.56–$3.62 Raised
Adjusted EPS (Constant Currency)FY 2025$3.49–$3.57 $3.59–$3.66 Raised
CapexFY 2025~$85M ~$85M Maintained
Adjusted Effective Tax RateFY 2025~6–7% ~6–7% Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2 2025)Current Period (Q3 2025)Trend
LatAm growth and pipelinePricing initiatives benefitting spread; acquisitions Grandata/Nubity contributing; guidance raised +19% y/y (18% cc) LatAm; wins: Banco de Chile, Financiaria Oh; Tecnobank closed Oct 1 Improving
Puerto Rico demand (ATH Móvil; POS)ATH Móvil strength; transaction growth; solid economic indicators Payment Services PR revenue +5%; ATH Móvil mid-teens growth; POS +7%; Bad Bunny events boosted volumes Stable-to-Improving
Merchant Acquiring spread/ticketQ1/Q2 benefited from pricing initiatives; spread improved Q2 Net revenue +3%; slight spread decrease; lower average ticket increased processing costs Normalizing
PIX cybersecurity incident (Brazil)N/AIsolated to PIX; vast majority of funds recovered; systems hardened; no commercial pipeline impact Stabilizing/Contained
Popular (Puerto Rico) contract economicsN/A (raise guidance)10% discount effective Oct 2025; ~$4M impact in Q4 and ~$14M in 2026; CPI caps 1.5% (MSA) and 2.5% (ATH) in 2025; escalator allows >2% capped at 2% starting Oct 2026 Headwind in Q4/2026
Capital allocation (M&A vs buybacks)Increased buyback authorization to $150M; guidance raised $150M buyback capacity available through 2026; net leverage ~1.8x; evaluating pipeline and buybacks amid stock levels Balanced/Mix

Management Commentary

  • “We delivered another quarter of strong results across Puerto Rico and Latin America… the combination of strong organic growth in LatAm and the contribution from M&A will continue to drive our diversification into growth markets” (Mac Schuessler) .
  • “We now expect revenues to be between $921 million and $927 million… constant currency growth of 10% to 11%… Adjusted EBITDA margin ~40%… adjusted effective tax rate 6% to 7%” (CFO commentary) .
  • “The incident was isolated to the PIX real-time payment system… vast majority of the funds have been recovered… we haven’t seen any negative commercial impact” (on Brazilian PIX incident) .
  • Press release: “Revenue increased 8% to $228.6 million… Adjusted EPS increased 7% to $0.92… Completed the purchase of 75% of Tecnobank” .

Q&A Highlights

  • LatAm durability and wins: Management emphasized scalable product suite and strategic wins (Banco de Chile; Financiaria Oh), with cross-sell potential between Cynthia and Tecnobank .
  • PIX incident impact: No adverse pipeline impact; systems hardened; issue affected multiple vendors across Brazil’s PIX ecosystem, not just EVTC .
  • Margins: Year-over-year compression largely due to prior-year LatAm one-time benefit; sequential trajectory aligned with expectations; Merchant Acquiring impacted by lower average ticket and mix .
  • Capital allocation: Net leverage ~1.8x; ~$150M buyback authorization remains; management balancing M&A pipeline and repurchases .
  • Puerto Rico macro/programs: Monitoring potential US government shutdown impacts on NAP/SNAP; funded through November, no direct impacts yet .

Estimates Context

  • Q3 2025 Actual vs Consensus (S&P Global): Revenue $228.587M vs $224.680M*; Adjusted/Primary EPS $0.92 vs $0.889*; both beats. Primary EPS estimates count: 6*; Revenue estimates count: 5*. Adjusted EBITDA had no consensus shown here. Estimates marked (*) retrieved from S&P Global.

Key Takeaways for Investors

  • The quarter was clean with top-line growth across segments and a clear EPS beat vs consensus; headline catalysts include raised FY guidance and LatAm deal momentum .
  • Margins modestly compressed y/y due to lapping a prior-year one-time LatAm benefit and mix in Merchant Acquiring; watch spread/ticket dynamics into Q4 .
  • FY 2025 revenue and Adjusted EPS guidance raise suggests confidence; Q4 will include Tecnobank and FX tailwinds (offset by Popular discount) .
  • PIX incident appears contained with funds largely recovered and no pipeline impact; operational resilience and cyber-hardening mitigate tail risk .
  • Near term: Expect steady Q4 performance similar to Q3 in Merchant Acquiring, mid-single-digit PR growth, high-teens LatAm growth with low-20s cc; watch Popular discount headwind .
  • Medium term: 2026 modeling should incorporate ~$14M Popular discount headwind, higher adjusted tax rate with LatAm mix, and continued LatAm momentum (including Tecnobank integration) .
  • Capital allocation remains flexible: net leverage ~1.8x, $150M buyback authorization available through 2026, active M&A pipeline .

Notes:

  • All actual results and management commentary are sourced from EVTC’s Q3 2025 8-K earnings press release and earnings call transcripts .
  • Prior quarter references use Q2/Q1 2025 8-Ks and .
  • Dividend press release (Q3 timing) ; event timing press releases .
  • Estimates marked (*) are values retrieved from S&P Global.