Evertec, Inc. (EVTC) is a leading full-service transaction-processing business and financial technology provider in Latin America, Puerto Rico, and the Caribbean. The company operates across 26 countries, serving a diverse customer base of financial institutions, merchants, corporations, and government agencies. Evertec's comprehensive suite of services spans the entire transaction-processing value chain, including merchant acquiring, payment processing, and business process management solutions.

Financials

In fiscal year 2023, Evertec reported annual revenue of $694,709,000 and net income of $79,722,000. The company generated robust operating cash flow of $224,290,000 and free cash flow of $139,314,000 during the same period. These financial results demonstrate Evertec's ability to capitalize on the growing demand for digital payments and financial technology solutions across its key markets.

Business Overview

Evertec's diversified business model and strategic focus on high-growth regions have been key drivers of its performance. The company's operations are divided into four main segments: Payment Services - Puerto Rico & Caribbean, Latin America Payments and Solutions, Merchant Acquiring, and Business Solutions. This diversification allows Evertec to offer a comprehensive suite of services to its clients, while also mitigating concentration risks.

Recent Developments

In the first quarter of 2024, Evertec reported total revenue of $205,318,000, a 28% increase compared to the prior-year period. This performance was driven by the full-quarter contribution from the company's recent acquisition of Sinqia, a leading Brazilian financial technology provider, as well as continued organic growth across all of Evertec's business segments.

The Payment Services - Puerto Rico & Caribbean segment saw a 10% year-over-year increase in revenue, driven by higher POS transactions and continued strength in the company's ATH Móvil Business platform. The Merchant Acquiring segment also delivered solid results, with a 7% revenue increase, benefiting from strong sales volumes and an improved spread.

In the Latin America Payments and Solutions segment, revenue surged by 110% year-over-year, reflecting the Sinqia acquisition as well as continued organic growth across the region. The Business Solutions segment returned to growth, with a 4% revenue increase, driven by various business lines and the impact of CPI-based pricing adjustments.

Evertec's management team remains focused on integrating Sinqia and leveraging the company's operational expertise to drive further growth and margin expansion. The company is prioritizing technology modernization, customer-centric initiatives, and pricing optimization to unlock the full potential of the Sinqia acquisition.

Outlook

Looking ahead, Evertec has raised the lower end of its revenue guidance for fiscal year 2024, now expecting revenue in the range of $846 million to $854 million, representing growth of approximately 22% to 23% over the prior year. The company also expects adjusted EBITDA margin to be between 38.5% and 39.5%, and adjusted earnings per share to be in the range of $2.85 to $2.94, up from $2.82 in the prior year.

Conclusion

Evertec's financial performance, diversified business model, and strategic focus on high-growth markets position the company for potential continued growth. The company's recent acquisition of Sinqia and its ongoing efforts to integrate and optimize the business further strengthen Evertec's competitive position in the rapidly evolving payments and financial technology landscape.

Evertec's financial results, strategic initiatives, and outlook present an opportunity for investors seeking exposure to the dynamic and fast-growing payments industry in Latin America and the Caribbean.