Evertec Q1 Earnings Call Highlights

Evertec NYSE: EVTC reported higher first-quarter 2026 revenue and adjusted EBITDA, lifted by growth in Latin America, the contribution from its Tecnobank acquisition and continued strength in Puerto Rico payments activity. Management also raised its full-year outlook following the closing of the Dimensa acquisition.

President and Chief Executive Officer Mac Schuessler said the company’s first-quarter results showed “continued execution against our strategic priorities and momentum across our core markets.” Total revenue rose 8% year over year to $247.9 million. On a constant currency basis, revenue increased about 5%.

Adjusted EBITDA was approximately $97 million, up 9% from the prior-year period, while adjusted EBITDA margin was 39.1%, in line with last year. Adjusted earnings per share were $0.90, up 3% year over year, supported by adjusted EBITDA growth and a lower share count from repurchases.

Dimensa Deal Closes as M&A Remains Central to Strategy

Schuessler spent part of the call outlining Evertec’s M&A framework, saying the company focuses on scalable assets with transferable capabilities, client overlap, regional footprint and recurring or volume-based revenue with opportunities for margin expansion.

The company closed its previously announced acquisition of Dimensa, which Schuessler said positions Evertec “amongst the largest financial SaaS providers in the market.” He said Dimensa adds client relationships, strengthens partnerships and expands the company’s opportunities in Latin America as it builds a “one-stop shop” portfolio of services.

From a financial perspective, Schuessler said Dimensa is expected to be neutral to slightly accretive to earnings in 2026, with synergies expected to begin in 2027. He said the company’s near-term focus is integration and execution.

During the question-and-answer session, Schuessler said Dimensa’s revenue is about 95% recurring and that the acquisition moves Evertec into two verticals where it was not previously present: insurance and risk. He also said the business strengthens Evertec’s position in funds and banks and offers both cost and revenue synergy opportunities.

Schuessler also said Sinqia integration work remains focused on operational discipline, product rationalization and go-to-market effectiveness. He said Tecnobank continues to support the company’s Brazil strategy by strengthening local scale and capabilities.

Puerto Rico Business Remains Stable

In Puerto Rico, management described the economic backdrop as stable. Schuessler cited positive trends in employment, strong tourism performance and resilient consumer spending. He said the unemployment rate remained at 5.6%.

Merchant acquiring revenue increased 2% year over year, driven by higher sales volume, though the segment saw a modest spread decline that management said was expected. Chief Financial Officer Karla Cruz-Jusino said sales volume and transactions each rose about 4%, helped by new high-volume merchants and existing customers.

Payment Services Puerto Rico and Caribbean revenue increased 6% to $58.4 million. Cruz-Jusino said the segment benefited from continued strength in ATH Móvil, particularly ATH Móvil Business, which delivered double-digit growth in both volume and transactions. POS transactions rose about 8% year over year.

Business Solutions revenue declined 9% to $59.5 million. Management attributed the decrease primarily to the 10% discount to Popular that began in October of the prior year and a non-recurring hardware and software sale in the prior-year quarter. Despite the revenue decline, the segment’s adjusted EBITDA margin increased about 240 basis points to 36.3%, reflecting lower expenses tied to the prior-year one-time sale and other cost-saving actions.

Latin America Drives Growth

Latin America Payments and Solutions was the largest contributor to the company’s revenue and EBITDA growth in the quarter. Revenue in the segment rose 32% year over year to $110.3 million. Currency tailwinds, primarily from appreciation of the Brazilian real, added approximately $6.8 million, or 8 percentage points, to segment growth. On a constant currency basis, the segment grew about 24%.

Cruz-Jusino said the growth reflected a full-quarter contribution from Tecnobank, continued strength in Brazil, solid performance from Grandata and organic growth across the region. Those gains were partially offset by attrition from the MELI relationship, which management said will anniversary in the second quarter, and pricing actions tied to key client contract extensions.

Adjusted EBITDA for the Latin America segment rose about 32% to $32.8 million, with a 29.7% margin, roughly aligned with the prior year. Cruz-Jusino said strong revenue growth was partially offset by foreign currency headwinds in markets such as Uruguay and Chile.

In response to an analyst question about macro uncertainty outside Puerto Rico, Schuessler said the company had nothing specific to call out and remained confident in 2026.

Guidance Raised for 2026

Evertec increased its full-year 2026 outlook following the first-quarter results and the closing of Dimensa. The company now expects reported revenue of $1.073 billion to $1.085 billion, representing year-over-year growth of 15.1% to 16.4%.

The outlook includes about 135 basis points of foreign currency tailwinds, mainly from the Brazilian real. On a constant currency basis, the company expects revenue growth of 13.8% to 15%, up from its prior range of 8.7% to 10%.

Cruz-Jusino said the updated forecast reflects the inclusion of Dimensa and continued performance across existing businesses. She said Evertec is not assuming any Dimensa synergies in 2026, with most cost and scale benefits expected in 2027 and beyond.

• Merchant Acquiring: Management continues to expect mid-single-digit revenue growth in 2026.
• Payments Puerto Rico and Caribbean: The company also expects mid-single-digit growth, supported by ATH Móvil and POS volume, partially offset by the Popular discount.
• Latin America Payments and Solutions: Revenue is now expected to grow in the high 30% range on a reported basis and mid-30% range on a constant currency basis.
• Business Solutions: Revenue is expected to decline in the low- to mid-single-digit range due to the Popular discount reset.

Adjusted EPS is expected to grow between 6.6% and 9.9% from the $3.62 reported for 2025, or between 5.2% and 8.6% on a constant currency basis. The company expects adjusted EBITDA margin of 39% to 40%, an effective tax rate of about 11% to 12% and capital expenditures of approximately $90 million.

Capital Allocation and AI Commentary

Evertec generated $31.2 million in net cash from operating activities during the quarter and spent $22.7 million on capital expenditures, including investments to modernize platforms and improve information security. The company paid down about $6 million of debt and returned $23.1 million to shareholders through dividends and buybacks.

The company repurchased 683,000 shares for $20 million in the quarter and paid about $3.1 million in dividends. As of March 31, it had about $130 million remaining under its share repurchase authorization through the end of 2027.

Net debt was $826.2 million at quarter-end, and net debt to trailing 12-month adjusted EBITDA was approximately 2.15 times, within Evertec’s target leverage range of 2 to 3 times. Total liquidity before closing the Dimensa acquisition was $460.3 million.

Asked about artificial intelligence, Schuessler said Evertec is “pretty bullish on AI generally,” citing potential benefits in efficiency, growth and service quality. He said the company is experimenting with AI across the organization, including using it in incident management for its PlacetoPay product and in its RiskCenter fraud monitoring product. Schuessler said he views AI as a catalyst and tailwind for the business rather than a threat to its software products.

About Evertec NYSE: EVTC

Evertec, Inc NYSE: EVTC is a leading full‐service transaction processor in Puerto Rico, Latin America and the Caribbean. The company delivers integrated technology solutions for electronic payments, providing financial institutions, merchants and governments with secure and scalable platforms to accept, process and settle transactions across card, ATM, debit and digital channels. Headquartered in San Juan, Puerto Rico, Evertec supports both domestic and cross‐border payment flows, enabling clients to streamline operations and expand their digital commerce capabilities.

Evertec's suite of services includes merchant acquiring, payment gateway connectivity, ATM and point‐of‐sale network management, and fraud prevention solutions.

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