EVERTEC (EVTC) Q3 2026 Earnings Call Transcript

Image source: The Motley Fool.

DATE

Tue, Nov. 3, 2026

CALL PARTICIPANTS

• Investor Relations – Lily Arteaga
• President and Chief Executive Officer – Morgan Schuessler
• Chief Financial Officer – Karla Cruz-Jusino

TAKEAWAYS

• Total Revenue — $283.0 million, an increase of 24% year over year driven by contributions from recent acquisitions and organic growth across most business segments.
• Adjusted EPS — $1.07, up 16% year over year reflecting higher adjusted net income and the benefit of a lower share count from repurchases.
• Latin America Payments and Solutions Revenue — $143.6 million, representing 59% growth (or 52% on a constant currency basis) due to contributions from Dimensa and Tecnobank alongside regional expansion.
• Merchant Acquiring Revenue — $51.0 million, a 9% increase supported by higher sales volumes and pricing initiatives that benefited non-transactional revenue.
• Payment Services PR & Caribbean Revenue — $60.1 million, up 9% year over year driven by 11% growth in POS transactions and double-digit growth in ATH Movil volume.
• Business Solutions Revenue — $58.6 million, down 5% primarily due to a 10% contractual discount for Banco Popular and the nonrecurrence of hardware sales.
• Adjusted EBITDA Margin — 39.0%, a decrease from 40.5% in the prior year quarter reflecting a shift in business mix as lower-margin Latin American operations expand.
• 2026 Revenue Guidance — $1.088 billion to $1.096 billion, representing an updated annual growth target of 16.7% to 17.6%.
• 2026 Adjusted EPS Guidance — $4.00 to $4.08, reflecting projected annual growth of 10.5% to 12.7% as stated by management.
• Net Debt to Adjusted EBITDA — 2.46x, a sequential improvement from 2.55x in the second quarter as the company continues to deleverage following the Dimensa acquisition.
• Operating Cash Flow — $176.3 million generated during the first nine months, which supported acquisition funding and shareholder returns.
• Shareholder Returns — $92.4 million returned through dividends and share repurchases in the first nine months, including 500,946 shares repurchased in the third quarter for $15.4 million.
• Capital Expenditures — $95 million (estimated for the full year), an increase from the previous $90 million target to support technology infrastructure and security.
• Latin America Segment EBITDA Margin — 30.1%, expanding 310 basis points year over year due to organic growth and high-margin contributions from Tecnobank.
• Sales Volume — 8% growth in the Merchant Acquiring segment, which outpaced a 5% increase in transactions due to higher average ticket sizes from increased gas prices.
• Acquisition Deployment — $186.6 million deployed for acquisitions during the first nine months, including the completion of the BBChain transaction.
• Adjusted Effective Tax Rate — 10% to 11% (estimated for the full year), reflecting the geographic mix of earnings and the tax structure in Puerto Rico.

Need a quote from a Motley Fool analyst? Email [email protected]

RISKS

• Cruz-Jusino warned that the anticipated renewal of the EBT relationship includes lower pricing, which is expected to temper segment growth in 2027.
• Schuessler noted that although the political environment in Brazil remains balanced, currency volatility has occurred and management is monitoring potential macro changes.

SUMMARY

EVERTEC, Inc. (EVTC +10.57%) reported a significant transformation in its revenue profile, with operations outside of Puerto Rico now contributing close to 50% of total revenue compared to 14% in 2015. Management stated that this shift reflects a multiyear strategy to expand across Latin America through disciplined M&A and organic growth in payments and financial software. The company reported strong performance in Brazil, the region’s largest market, and noted that digital modernization trends are providing a substantial runway for growth as 30% of adults in the region remain unbanked. The company is currently integrating several strategic acquisitions, including Dimensa and the recently closed BBChain, while preparing for the implementation of major new contracts in Chile and Puerto Rico.

• Management reported that the 10% contractual discount for Banco Popular fully lapped in October 2026, removing a significant year-over-year headwind for the Business Solutions segment as the company enters 2027.
• The company is executing a multiyear AI roadmap, with CEO Schuessler stating, “Early pilots involving ATH Movil and our engineering teams in Brazil are demonstrating the potential to improve productivity, quality and delivery times.”
• Evertec secured a strategic processing win with Transbank in Chile, which is expected to begin contributing to revenue in late 2027 with a more meaningful ramp in 2028.
• The ATH Movil platform continues to expand its utility, with triple-digit growth in ATH Business transaction volumes reported during the third quarter.
• Management indicated that the acquisition of BBChain expands the company’s capabilities in blockchain, tokenization, and digital asset technology infrastructure to stay ahead of evolving financial services trends.
• Evertec maintains a total liquidity position of $450 million and is currently progressing the renewal of its credit facility ahead of its maturity date.

INDUSTRY GLOSSARY

• ATH Network: A leading ATM and PIN debit network in Puerto Rico and the Caribbean owned and operated by Evertec.
• ATH Movil: A mobile payment application that allows users to send and receive money and make business payments in real time.
• Dimensa: A provider of core banking and financial software solutions in Brazil, acquired by Evertec to expand its regional software footprint.
• Tecnobank: A Brazilian technology firm specializing in credit and collateral management for the automotive and financial sectors.
• BBChain: A technology company focused on blockchain and digital asset infrastructure.
• Merchant Acquiring: A service that enables businesses to accept and process electronic payment options such as credit and debit cards.
• EBT (Electronic Benefit Transfer): A government system that allows recipients to access food and cash benefits through a plastic debit-style card.

Full Conference Call Transcript

Operator: Good day, and welcome to the EVERTEC Third Quarter 2026 Earnings Conference Call. [Operator Instructions] Please note, today’s event is being recorded. I’d now like to turn the conference over to Lily Arteaga. Please go ahead.

Lily Arteaga: Thank you, and good afternoon. With me today are Mac Schuessler, our President and CEO; and Karla Cruz-Jusino, Chief Financial Officer. Before we begin, I would like to remind everyone that this call may contain forward-looking statements and should be considered in conjunction with cautionary statements in our earnings release and the company’s most recent periodic SEC report. During today’s call, management will provide certain information that will const

Source: www.fool.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.