• Revenue: $845.5 million for 2024, a 22% increase year over year.
• Merchant Acquiring Revenue: Grew by 11% due to pricing initiatives and increased sales volume.
• Payments in Puerto Rico Revenue: Increased by 6%, driven by higher transaction volumes.
• LatAm Revenue: Increased by 62% year over year, with LatAm making up approximately 33% of total revenue.
• Adjusted EBITDA: $340.2 million, up 17% year over year, with a margin of 40.2%.
• Adjusted EPS: $3.28, up 16% year over year.
• Operating Cash Flow: Approximately $260 million for the full year.
• Shareholder Returns: Approximately $95 million returned through share purchases and dividends.
• Liquidity: Approximately $468 million as of December 31, 2024.
• Fourth Quarter Revenue: $216.4 million, up 11% year over year.
• Fourth Quarter Adjusted EBITDA: $88.6 million, up 24% year over year, with a margin of 40.9%.
• Fourth Quarter Adjusted Net Income: $56 million, up 37% year over year.
• Fourth Quarter Adjusted EPS: $0.87, up 40% year over year.
• Net Debt: $706.8 million at year end, with a net debt to trailing 12 months adjusted EBITDA of 2.06 times.
• 2025 Revenue Outlook: Expected to be between $889 million to $899 million, growth of 5.1% to 6.3%.
• 2025 Adjusted EPS Outlook: Expected growth between 1.8% and 5.2% from 2024.

• Warning! GuruFocus has detected 5 Warning Signs with EVTC.

Release Date: February 26, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Evertec Inc (NYSE:EVTC) reported a record revenue of $845.5 million for 2024, marking a 22% increase over the previous year.
• The successful integration of Sinqia, the largest acquisition in Evertec's history, contributed significantly to revenue growth, particularly in Latin America.
• Adjusted EBITDA rose by approximately 17% year over year to $340.2 million, with a margin of 40.2%, reflecting strong efficiency and expense management.
• The company has developed a robust business pipeline in Latin America, converting opportunities into significant business wins, including a deal with Grupo Aval in Colombia.
• Evertec Inc (NYSE:EVTC) returned approximately $95 million to shareholders through share purchases and dividends, demonstrating a strong commitment to shareholder value.

Negative Points

• The economic activity index in Puerto Rico decreased slightly in 2024, although it remains above pre-pandemic levels.
• The adjusted EBITDA margin decreased by approximately 180 basis points from the previous year, primarily due to the inclusion of Sinqia, which has lower margins.
• Evertec Inc (NYSE:EVTC) faces a 10% discount on Popular services starting in October 2025, which will impact revenue and adjusted EBITDA.
• Currency fluctuations posed a significant headwind, negatively impacting segment growth by 9.6 percentage points, mainly due to the devaluation of the Brazilian currency.
• The company anticipates client attrition in 2025, notably from Mercado Libre, which could affect growth in the Latin America segment.

Q & A Highlights

Q: Have you considered providing a midterm guide to help investors understand the business better, especially after incorporating Sinqia and other acquisitions? A: Joaquin Castrillo, CFO, stated that the focus is currently on providing guidance for 2025 due to several moving pieces. The company aims to be clear on areas of focus as they move into 2025.

Q: Can you provide more details on the expected performance of Sinqia, especially given the Brazilian economy's situation? A: Morgan Schuessler, CEO, mentioned that Sinqia's growth decelerated initially but has started to reaccelerate. The company has focused on upgrading technology, renegotiating contracts, and optimizing margins. They are optimistic about achieving double-digit growth in the LatAm segment.

Q: How is the integration of Evertec's processing business into Brazil progressing? A: Morgan Schuessler, CEO, explained that the focus has been on improving existing businesses and verticals. There have been small successes on the payment side, and there is optimism for further focus in the coming years.

Q: How confident are you in navigating the 10% discount slated for October? A: Morgan Schuessler, CEO, expressed confidence in managing the discount through cost efficiencies and initiatives. The company has already seen positive impacts on margins and is well-prepared for the discount's effect.

Q: What is the contribution of pricing to the merchant segment's growth, and is there any inorganic effect? A: Joaquin Castrillo, CFO, clarified that there is no inorganic effect in the growth rates. The growth in Q4 was more skewed towards pricing than volume, with a mix of pricing, volume, and non-transactional fees contributing to growth.

Q: What is the state of the M&A market in Latin America, and can we expect a quicker pace of M&A? A: Morgan Schuessler, CEO, noted that the company has a good M&A pipeline and is focused on diversifying through smart deals. The recent acquisitions have been smaller in size, and the company remains committed to engaging in M&A.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.