What Evertec (EVTC) Said on Its Q3 Earnings Call

Key Points

• Q3 revenue rose 24% year over year to $283 million, while adjusted EBITDA increased 19% to $110 million. Latin America Payments and Solutions led growth, with revenue up 59% and adjusted EBITDA up 77%, reflecting acquisitions and organic expansion.
• Expansion in Latin America has reshaped Evertec’s business: nearly half of revenue now comes from outside Puerto Rico, compared with 14% in 2015. Management cited growing demand for digital payments and financial software across the region.
• Evertec raised its 2026 revenue and adjusted EPS outlook, forecasting reported revenue growth of 16.7%–17.6% and adjusted EPS growth of 10.5%–12.7%. Some Q3 Payment Services growth came from a Puerto Rico vehicle-fine amnesty program that ended in July and is not expected to recur next year.

Evertec NYSE: EVTC reported third-quarter revenue growth of 24% year over year, supported by acquisitions, broad-based organic expansion and favorable foreign exchange movements, as the financial technology company continued to increase its presence across Latin America.

Total third-quarter revenue was $283 million, while constant-currency revenue was $277 million, up 21% from the prior-year period. Adjusted EBITDA rose 19% to $110 million. The company raised its full-year 2026 revenue and adjusted earnings outlook, citing performance through the first nine months and favorable currency movements.

Latin America Expansion Reshapes Revenue Mix

President and CEO Mac Schuessler said Evertec has reached an important stage in its evolution following two strategic Latin American acquisitions completed during 2026. Nearly half of the company’s revenue now comes from outside Puerto Rico, compared with 14% in 2015, according to management.

Schuessler said the company has expanded its regional presence and technology offerings across payments and financial software. Evertec operates as a merchant acquirer in Latin America, provides financial software to Brazilian institutions, and owns and operates Puerto Rico’s ATH payment network.

“Today, we are a broader, more balanced financial technology infrastructure company with meaningful positions across payments and financial software,” Schuessler said.

Management pointed to modernization trends in Latin American financial services, including the shift from cash and branch banking toward digital and instant-payment systems. Schuessler said the company sees opportunities to provide core banking, compliance, asset-management, payment acceptance, transaction processing, card issuing and digital-payment services.

During the quarter, Evertec’s Latin America Payments and Solutions segment was the largest contributor to company revenue and EBITDA growth. Segment revenue increased 59% to $144 million, including about $6 million from foreign currency movements, primarily related to appreciation of the Brazilian real. On a constant-currency basis, segment revenue rose about 52%.

Growth reflected contributions from Dimensa and Tecnobank, along with expanded outsourcing engagements and repricing in Brazil, expanded customer relationships in Colombia and Chile, and higher value-added-services activity in digital, recovery, analytics and cloud offerings.

Latin America Payments and Solutions adjusted EBITDA increased 77% to $43 million, and its adjusted EBITDA margin expanded to 30.1% from the prior-year period. On a constant-currency basis, the segment’s margin was 31.5%.

Segment Results Include Puerto Rico Payments Growth

Merchant Acquiring net revenue increased 9% year over year to $51 million. Sales volume rose approximately 8%, ahead of transaction growth of about 5%, as higher gas prices and merchant mix lifted average ticket size. The segment also benefited from new high-volume merchants, including Puerto Rico electric utility LUMA, as well as pricing initiatives.

Merchant Acquiring adjusted EBITDA rose $3 million to $21 million, with margin expanding about 220 basis points to 42%.

Payment Services revenue increased 9% to $60 million. The company cited 11% point-of-sale transaction growth, double-digit volume and transaction growth at ATH Móvil, activity from its partnership with a global payments company, and higher vehicle-registration and fine-processing activity.

Chief Financial Officer Karla Cruz-Jusino said the vehicle fine-related activity was tied to a Puerto Rico government amnesty program that ended in July. She said the bulk of the benefit occurred in the third quarter and is not expected to recur next year.

Payment Services adjusted EBITDA increased 14% to $34 million, while the segment’s adjusted EBITDA margin expanded approximately 280 basis points to 57%. Management said a more favorable revenue mix helped offset a one-time operational loss and higher technology costs.

Business Solutions revenue declined 5% to $59 million, primarily due to a 10% contractual discount for Popular that took effect in October 2025 and the absence of prior-year hardware sales. Adjusted EBITDA fell 18% to $21 million, with a 35.2% margin, reflecting lower revenue, higher reserves and increased technology costs.

Higher 2026 Outlook and 2027 Considerations

Evertec now expects 2026 reported revenue of $1.088 billion to $1.096 billion, representing year-over-year growth of 16.7% to 17.6%. The outlook assumes an average Brazilian real exchange rate of approximately 5.45 to the U.S. dollar for the remainder of the year.

On a constant-currency basis, the company expects revenue growth of 14.5% to 15.4%, broadly consistent with its earlier outlook. Evertec narrowed its adjusted EBITDA margin forecast to approximately 39.5% on a reported basis and 40% on a constant-currency basis.

The company expects adjusted EPS growth of 10.5% to 12.7% from $3.62 in 2025. Cruz-Jusino said higher interest expense, depreciation and amortization, and non-controlling interest associated with Tecnobank are expected to limit the extent to which EBITDA growth translates into earnings growth.

For 2026, Evertec expects high-single-digit growth in Merchant Acquiring and Payments Puerto Rico and Caribbean. It expects Latin America Payments and Solutions revenue to grow in the low- to mid-40% range on a reported basis and the mid- to high-30% range on a constant-currency basis. Business Solutions revenue is still expected to decline in the mid-single-digit range, partly due to delays in certain new business wins.

Management said the Popular contractual discount will no longer be a year-over-year headwind beginning in the fourth quarter. The company also raised its capital expenditure forecast to about $95 million from $90 million, primarily for technology, infrastructure and security investments.

Cash Flow, Leverage and Growth Initiatives

Through the first nine months, Evertec generated approximately $176 million in cash from operating activities. It invested about $75 million in the business, deployed approximately $187 million toward acquisitions and returned roughly $92 million to shareholders through dividends and share repurchases.

Quarter-end net debt was approximately $1 billion, up $135 million from the prior quarter primarily due to financing associated with the Dimensa acquisition. Net debt to trailing 12-month adjusted EBITDA was 2.46 times, within management’s targeted range of two to three times. The company ended the quarter with $450 million in total liquidity, excluding restricted cash.

Looking toward 2027, management expects continued growth from merchant wins, payments, software, value-added services and cross-selling in Latin America. Evertec said its Transbank relationship in Chile is expected to begin contributing late in the second half of 2027, with a more meaningful ramp expected in 2028.

Schuessler also said the company is pursuing artificial intelligence applications in software development, incident resolution, cloud optimization and sales operations. He described AI as a multiyear transformation intended to improve cost structure, service quality and delivery speed over time.

About Evertec (NYSE:EVTC)

Evertec, Inc is a payment processing and financial technology company that provides transaction-processing services and business technology solutions to financial institutions, merchants, government agencies and other organizations. The company operates through businesses that support electronic payments, merchant acquiring, payment networks and related financial services.

Its products and services include debit and credit card processing, point-of-sale and e-commerce payment acceptance, automated teller machine processing, prepaid services, electronic bill payment and money transfer solutions.

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