Q2 2021 Evertec Inc Earnings Call
Good afternoon, everyone and welcome to our Tech second quarter 2021 earnings Conference call.
Today's conference call is being recorded at this time I'll turn the call over to William Maina of Investor Relations. Please go ahead.
Thank you and good afternoon with me today are Mac Schuessler, our president and Chief Executive Officer, and Joaquin cash trio, our Chief Financial Officer before we begin I'd like to remind everyone that this call may contain forward looking statements and should be considered in conjunction with cautionary statements contained in our earnings release and the company's most recent peer.
Arctic FCC report.
During today's call management will provide certain information that will constitute non-GAAP financial measures under SEC rules, such as adjusted EBITDA adjusted net income.
Adjusted earnings per common share.
Reconciliations to GAAP measures and certain additional information are also included in today's earnings release and related supplemental slides, which are available on the Investor Relations section of our company website at Www AMETEK, Inc. Dot com.
I'll now hand, the call over to Mac.
Thank you and good afternoon, everyone. Thank you for joining us on our second quarter 2021 earnings call. We delivered another strong quarter of financial results. As we continued to benefit from increased transactions in Puerto Rico versus last year's volumes, which were impacted by the pandemic.
In America, we continued to benefit from recent implementations as well as effective management of our operating expenses.
Based on our Q2 results and the momentum we see heading into the second half of the year. We are again, increasing our guidance for 2021 Joaquin will provide further details later in the call.
Beginning on slide for our total revenue was $149 million for the second quarter, an increase of 26% compared to Q2 of 2020.
Adjusted EBITDA was $80 million, an increase of 60% as compared to the prior year.
Our margin for the second quarter was approximately 54 per cent of a 1000 basis points higher than last year.
<unk> the scalability of our business.
Our adjusted earnings per share was <unk> 78, an increase of 105 per cent.
We continued to generate significant operating cash flow during the quarter of $112 million and we returned approximately $32 million for our shareholders through dividends and share repurchases. Additionally, our liquidity remained strong at $319 million as of June 30th.
Moving onto our updates for Puerto Rico on slide 5.
We saw strong volume and revenue growth in Q2, driven by the incremental inflow of federal stimulus funds and increase consumer spend versus last year, which was significantly impacted by the COVID-19 Lockdown.
Archant acquiring sales volume growth was approximately 63% year over year, reflecting transaction growth of approximately 68 per cent.
Most of this growth was driven by the month of April and May which experienced sales volume increases of approximately 118% and 69% year over year, respectively.
Our results in Puerto Rico also benefited from continued strong growth in Ath mobile products, which delivered approximately 60% year over year revenue growth.
I'm also pleased to report that our previously announced large printing contract, which we signed in the first quarter is fully implemented and in production.
As a reminder, this is 1 of the largest printing contract in <unk> history and is anticipated to benefit our business solutions segment in the back half of 2021.
Turning to the operating environment in Puerto Rico, as I mentioned and as you can see in our results. The combination of the reopening of the island and the incremental federal stimulus funds continue to positively impact our results.
Vaccinations continue to increase and with over 60% at the population fully vaccinated.
Rico government further reduced restrictions in early July and the economy is mostly open today.
We do continue to monitor the effects of the Delta variant, which as has been the case in other places has resulted in an increased number of positive cases over the past few weeks.
Now turning to Latin America on slide 6 as I mentioned on our last call. We continue to see varying levels of COVID-19 restrictions vaccination levels and reopening from country to country. For example vaccine distributions began in late February in Brazil, Colombia, Chile, and Mexico, However, infection rates still remain relatively.
Hi in these countries. So we remain cautious with respect for our outlook for a recovery throughout the region.
Nevertheless, we are pleased to have delivered another quarter of strong double digit revenue growth in Latin America.
Our performance continues to be driven primarily by the implementation and go live of the major wins and expand our relationships we discussed throughout last year, including Banco popular Costa Rica, Mercado Libre, Mexico, and Santander, Chile, as well as our regional expansion a place for that.
In summary, we delivered strong second quarter results and we are again, raising our 2021outlook.
While we will continue to monitor the impacts of COVID-19 across our geographic footprint and remain cautious in certain countries underlying demand for our solutions is robust and we continue to execute well against our growth plan.
Our cash flow generation and balance sheet remain very strong, enabling us to continue executing on our capital deployment strategy.
I will now hand, the call over to Joaquin drove you our results and guidance for more detail.
Thank you Mac and good afternoon, everyone.
Turning to slide 8 you will see that consolidated second quarter results for everything.
Total revenue for the second quarter was $149.1 million or approximately 26% compared to the prior year's Covid impacted results of $117.9 million.
As Mike mentioned, our Q2 results reflect increased transaction volumes in Puerto Rico, mainly impacted by the influx of federal stimulus and by improved consumer demand as well as double digit growth in Latam driven by our recent new business implementations and expanded relationships.
Adjusted EBITDA for the quarter was $80.3 million, an increase of 60% from $50.2 million in the prior year.
Adjusted EBITDA margin was 53.8 per cent and this represents an increase compared to the prior year of over 1000 basis points.
Expansion in our margin primarily reflects the higher payment revenue in both Puerto Rico, and Latin America, the favorable impact from currency and the benefit of dividends received from our investment.
Held under the equity method.
Adjusted net income for the quarter was $57.1 million, an increase of 106% as compared to the prior year, primarily reflecting the higher adjusted EBITDA, nor gosh interest expense. This was partially offset by increased operating depreciation and amortization driven by capital expenditures in the prior year as well as key.
Key projects that have gone into production.
Our adjusted effective tax rate in the quarter was 11, 7%.
While the prior year tax rate was impacted by the COVID-19, lockdown shifting our revenue mix towards higher tax businesses.
Adjusted EPS was <unk> 78 for the quarter, an increase of 105 per cent compared to the prior year.
Moving on to slide 9 I'll now cover our segment results starting with merchant acquiring.
In the second quarter merchant acquiring net revenue increased 55% year over year to $38.3 million driven primarily by increased sales volume, reflecting stronger consumer demand and that significantly impact that COVID-19 related federal stimulus had on overall sales.
Sales volumes in the quarter increased approximately 63% and transactions increased approximately 68% year over year.
For the month to month basis sales volumes were up 118% in April an approximate <unk>, 69% in may reflecting the severe impact of COVID-19, lockdowns in the same month last year.
Sales volume growth slowed to approximately 27% in June as the initial shock from the pandemic during the prior year began to subside and we saw those from a demand improved toward the end of the second quarter in the prior year.
Our results also benefited from incremental EBT funds that began in March of this year and extended through the second quarter.
Partially offsetting our revenue growth in Q2 was reduced spread primarily due to a lower average ticket as well as a change in card mix from debit to credit as the mix between products also move towards normalization.
We expect average tickets will continue to decrease as these move towards more normalized levels in the second half of this year.
Adjusted EBITDA for the segment was $20.5 million or 54% driven by higher revenues in the quarter adjusted.
Adjusted EBITDA margin was 53.6 per cent a decrease of approximately 40 basis points as compared to last year, primarily driven by a higher number of transactions processed as a result of a lower average ticket.
Yeah.
On Slide 10, you will see the results for the payment services, Puerto Rico and the Caribbean segment.
Revenue for this segment in the second quarter was $38.6 million or approximately 41% driven by increased transactions across B O S. ATM on ath mobile compared to last year's Covid impacted results and also positively impacted by Covid related federal stimulus flowing through the Puerto Rico economy.
Consistent with the merchant acquiring segment payment services transaction growth was highest in April then moderated in May and again in June.
<unk> mobile and <unk> mobile business transactions contributed an incremental $1.7 million of revenue in the second quarter. Additionally, the segment benefited from increased intersegment revenue for transaction processing and risk monitoring services for Latin America.
Adjusted EBITDA for the segment was $33.6 million.
78% as compared to last year.
Adjusted EBITDA margin was 61, 2% over 200 basis points as compared to last year net.
Significantly increasing our margin was primarily due to higher revenue and scalability of this segment compared to last year's pandemic impact that results in a segment with a high percentage of fixed costs.
On Slide 11, you will see the results for our payment services Latin America segment.
Revenue for this segment in the second quarter was $25.8 million or a.
Approximately 30% as compared to last year as Mike mentioned this increase was driven by the new business implementations and expanded relationships such as Banco popular for Costa Rica Mogul, you ran Mexico, and Santander, Chile, as well as increased revenue from place to be.
Adjusted EBITDA for the segment was $11 million and adjusted EBITDA margin was 42.5 per cent of approximately 200 basis points as compared to last year.
Given by higher revenue and the benefit of balance sheet re measurement in nonfunctional currencies of approximately $1.5 million.
Minder, Our Latin America segment margin is currently benefiting from established minimums in the front under contract with low transaction levels, we would expect margins to move towards mid to high thirties as transactions continue to increase over time.
On Slide 12, you will find the results for the data solutions segment.
Business solutions revenue for the second quarter was approximately 9% to $60.7 million.
Net revenue increase in the quarter benefited from incremental volumes on core banking services provided to popular.
Growth from services that started in the second half of last year and growth of our new printing contract, which Mike referenced earlier.
For the quarter adjusted EBITDA was $30.6 million, an increase of 27% and I just said the EBITDA margin was 55%.
Approximately 720 basis points as compared to last year.
The adjusted EBITDA margin improvement was primarily driven by the revenue growth as well as lower operating expenses, primarily a decrease in cost of sales coupled with lower employee expenses of the prior year included special payments for employees working on site during the pandemic lockdown.
Moving on to Slide 13, you will see a summary of corporate and other are second quarter. Adjusted EBITDA was a negative $5.5 million a decrease of 16% compared to prior year.
Adjusted EBITDA as a percentage of total revenue was 3.7% on lower than prior year by approximately 190 basis points, primarily due to the high revenues and cost controls.
Moving onto our cash flow overview on slide 14.
Our beginning cash balance was approximately 221 million, including restricted cash of approximately $18 million.
Net cash provided by operating activities was approximately 112 million a nearly $25 million increased compared to prior year.
Capital expenditures were approximately $30 million in part driven by higher obsolescence spend how do we accelerate some projects as well as continuous focus on innovation.
Regarding capital expenditures for the full year, we now anticipate approximately $60 million of Capex.
From our prior guidance of $50 million to $55 million.
We also recorded approximately $15 million for the extension and expansion of our relationship with first line during the first quarter and net securities purchased in the prior quarter of $3 million.
We paid approximately $25 million in long term debt payments $9 million in withholding taxes on share based compensation and 2 million of other debt pay downs, which resulted in a total net debt decrease of approximately $35 million.
We paid cash dividends of approximately $7 million and repurchased approximately $24 million of common stock for a total of approximately $32 million returned to our shareholders.
We have approximately 76 million available for future use under the Companys share repurchase program.
Our ending cash balance as of June 30th was $219 million and this included approximately $19 million of restricted cash. Additionally, we recently announced another 5 cent dividend to be paid.
On September 32021 to shareholders of record as of August 2nd 2021.
Moving to slide 15, you will find a summary of our debt as of June 32021.
Our quarter ending net debt position was approximately $276 million comprised of approximately $200 million of unrestricted cash.
Approximately $476 million of total short term borrowings and long term debt our weighted average interest rate was 4.5 per cent.
Our net debt to trailing 12 months adjusted EBITDA was approximately 147 times as of June 30th total liquidity was approximately $319 million. This balance excludes restricted cash and good for the available borrowing capacity under our revolver.
Moving to slide 16, I will now provide you with an update on our 2020.1 outlook.
Given our Q2 results and additional visibility we now expect revenue to be in a range of 570 million to 579 million representing growth of 12% 13%.
Our adjusted earnings per share outlook of $2.56 to $2.66.
Represents a growth range of 24% to 28% as compared to the adjusted earnings per share in 2020 of $2.7.
On a GAAP basis earnings per share is anticipated to be between $2 from <unk> to $2.11.
Our payments segment in Puerto Rico had a very strong first half of the year driven mostly by the impact of Covid related federal stimulus impacting consumers directly will continue benefiting from this tailwind in the second half, but do expect some moderation when compared to the first half as we begin to move away from Wendy's phones were dispersed and are some of the rig.
<unk> funds in these programs begin to bed and.
As an example.
The funds for certain programs ended in June unfolds expected in the second half of the year will be lower than those seen through June 30, and enhanced unemployment is expected to end in the third quarter.
Additionally, we continue to expect normalization of the average ticket as well as the mix of cards, which will pressure our merchant spread.
We continue to expect our perm growth for the full year to be in the high teen our business solutions segment.
<unk> see some moderation in comparison to the first half and down in comparison to prior year as we had a significant onetime benefit from the north location contract last year and some of the Covid related services provided to the government begins to subside.
We now believe adjusted EBITDA margins will be in a range of 49% to 50%. We continue to expect from a margin headwind from the normalization of the average ticket and the high margin benefit from the department of education contract last year.
We are also expecting incremental expenses in the second half of the year at the annual Merit increase given to employees in July takes effect and as we execute on specific initiatives that will continue to improve our operations and products going forward.
We continue to expect our full year tax rate to be in a range of 13%, 14%. Our guidance also includes the benefit of the share repurchases, we completed through Q2.
In summary, we generated strong second quarter results, which led us to again raise our full year 2021 guidance, we're executing well against our growth plan on track to deliver continued solid results in the second half of this year.
With that operator, please open the line for questions.
Yes. Thank you at this time, we will begin the question and answer session to ask a question you May Press Star then 1 on your Touchtone phone.
If you are using a speaker phone please pick up your handset before pressing the keys to withdraw your question. Please press Star then 2.
At this time, we will pause momentarily to assemble the roster.
And this afternoon's first question comes from Bob Napoli with William Blair.
Yes. Thank you good afternoon, congratulations a really really strong results.
Great.
I guess, that's the tricky part is trying to figure out.
Now what's the change for the long term, Puerto Rico, Latin America has a lot of cash and Covid is making it for I think it probably accelerated permanently that day.
Digital shift is that do you have any feel for that as well.
What is it able to are you able to parse that how did the numbers and what you think it's safe for permanent.
Second a shift versus temporary led by stimulus programs and the like.
About 2020 to Covid.
What I would say, Bob we definitely see obviously the move towards the digital channels on <unk>.
As we can do it do we bought Ath mobile Ath mobile business, specifically in Puerto Rico, we are seeing and we expect as we've said in Nevada from that to definitely day game in terms of parsing. It out obviously, if things start to open up and you start to have again kind of people going to brick and mortar restaurants, we are expecting to see somewhat.
Breath and come back and but again I.
I don't know if you can parse that out specifically are that we will right now for 2022.
And Bob I mean, some of it is permanent and if you've noticed during the quarter. We did gross 60 per cent and some of those channels, which is still incredibly healthy it's much slower than I mean, it's slower than we saw in previous quarters. When we were in lockdown mode or coming out of the lockdown for 60% are still healthy, but I would say for some of the trends and more peer to peer transactions more.
Th mobile business transactions, the increased demand of place to pay our ecommerce gateway that we're seeing increased demand in Costa Rica more than we saw prior to the pandemic and that's a combination probably of a shift of spend and also that we have a better product that we've rolled out in some of these markets. There is some of this is a permanent.
We believe in a trajectory that will continue to to be helpful to our business, but at this point, it's very difficult to parse that out.
But some of this is definitely a permanent.
So the large credit contract.
For business solutions is that like a 1 time revenue source or is that an ongoing benefit.
Can lead to monetize the for.
R&D contract Bob.
<unk> said you had a very large credit I think contract yeah.
So it was it was actually a friend and contract Bob and then price Okay printing force yet, but it was I mean, it is meaningful to that segment to that business. In particular it is not just a 1 time deal.
A longer term contract so it'll have a positive effect into the future. It started during the quarter. So it's not fully annualized in our numbers that will fully annualize next year, but it's not a 1 time 1 time deal. It is an ongoing contract with a very large company in Puerto Rico to do their planning.
Okay, Great and then just what was the drought with July transaction growth and last question for me how has the know how is Chile doing.
Sure So I'll take Chile, Chile again, we've been pleased with our progress we said on the last call even ex.
Reached or exceeded where they thought they would be at this point during the year by rolling out the product to our knowledge. They were the first ones in the market rolling out a product that competes with Trans bank. We're in the process of localizing now the ecommerce gateway place to pay.
For that product is going very well and exceeding expectations. When it comes to the July numbers out and not talking in terms of the July numbers, Bob we're still going through and kind of cleaning the numbers, but there was some moderations sequentially from what we saw coming out of the month of June.
So and that is something that as we said in the prepared remarks, we kind of expect right. I mean, we did see a very significant pick up here in Q training, mainly driven by kind of a push up all the stimulus coming into Puerto Rico aim and kind of making that month of April may really high bars on what we're seeing so we're going to move a little bit of <unk>.
Way from 1 that was his first day.
The month of June just on a sequential basis was slightly lower than the month of May and number for July slightly lower than the month of June.
Thank you appreciate it.
Thanks, Bob.
Thank you and the next question comes from Jamie Friedman with Susquehanna.
Hi, Thank you great results here Mac.
We're keen.
You had mentioned were keen.
Dividend.
Benefit.
Oh, yeah, yeah, what's that about.
So we have a we have an equity method investment, where we usually just kind of recognize day.
Our portion of ownership of their net income, but this time around they provided or are they paid a dividend that from our perspective impacts positively our EBITDA unites all cash transaction.
In the Dominican Republic with Kantar.
So we own a stake in the Dominion Guy Republic processing company.
Carton it and that's what we're referring to where you think that even this quarter and that dividend is impacting positively the margin.
Okay did you.
I'm just trying to get the kind of normalized EBITDA margin did you quantify that it's on page 8 right.
Got to tell you the.
The normalized margin for the quarter is about 51%.
If you exclude actually if you exclude the vehicle <unk> D. V. Then and we usually also normalize for the foreign currency Remeasurement.
Got it okay.
And then Mac.
Is there any way to proportion of wise.
Meli be pop and Santander, Chile, and I didn't hear you mention city this time.
<unk>.
Which of those is.
The most significant or.
Just generally.
Sure.
What stages, what stages are they and maybe is a better way to say it.
So let me say this.
Here at Banco popular Costa Rica, so it's not it's not Puerto Rico.
And.
The largest of those are at Santander Chile.
Each of them are meaningful to the segment and reputation Ali as you know Jamie Mercado Libre is 1 of the most valuable companies in the region and the most sophisticated E Commerce company in the regions our reputation and we think that they're all important but Santander Chile is the largest.
Okay, and any reason you Didnt mentioned city, Mexico No no no reason in particular, yes. Philly continues we're going to do the work on city and I think the only difference there that I would kind of bring to your attention is mainly have gone into production on and we are already kind of seeing some of the progress Cds on our platform that <unk>.
Even though it's knowing production a will grow as we start to kind of create more volume within that platform. So it's something that will grow into something more meaningful over time, as we start to drive more and more transactions.
Got it thank you I'll jump back in the queue.
Thanks, Jamie.
Thank you and the next question comes from Russell Gunther of D V K B W.
Hi, Thanks for taking my question and congratulations on a strong quarter.
I guess my first question just on the second half guide it seems like the day.
Despite the dusk launch you guys are expecting to go through that and it sounded like.
The delta versus your prior expectation net mostly better stimulus funding that's been in the hand of the consumers is that day is the biggest delta now versus before.
Are you also seeing just better underlying macro trends at the fed.
Ultimate is moving and things like that.
I mean it.
I think it's a little bit of everything right definitely stimulus is impacting many of the macro trends that we follow in Puerto Rico. So again, it's very hard to parse out how much.
Of the stimulus will continue to have a kind of a long lasting effect, but for sure I mean coming out of Q2 on the amount of funds that have been received and what were expecting will continue to be a tailwind will will be part of what we're expecting on what we now expect in the second half of the year or in the new kind of guidance that we provided.
So it is an important part of that.
And then just following up on the margins you know even with even with the adjustments delivered strong margin quarter.
And you have some puts and takes in the back half, but as we think about margins longer term I mean, I would think that you should continue to see an upward bias as revenues expand.
Whereas how you think about and what margin expansion in a normalized environment.
Look we've been consistent investing saying that as we grow our top line, we should be in a position to expand margin having said that we are growing very fast in Latin America, where we are driving and kind of a lower margin about what we have and some of that worked for vehicle segments. In addition.
Just kind of thinking about the second half and some other puts and takes.
We have some of that in the average day getting our merchant acquiring portfolio on some of the slowdown in Inc.
And just the overall feel.
Seamless plus the change in product mix that will put pressure on the overall yield per transaction, so that that should get reflect that on the.
From the overall margin, but in general as we look forward I mean, we do see this we're very margin focused.
You can see the scalability of the business when we drive the top line.
Got it and just a quick 1 for you Mike you know just the M&A pipeline, what's that looking like guarantee valuation seem to be getting out of hand in this environment. So should we expect you guys to keep doing more buybacks or just updated thoughts on M&A.
Yeah, I would say our thesis hasn't changed I mean, you've seen some pretty.
High valuations in Latin America with some of the more recent deals, but we do have opportunities that we're looking at opportunities that we're excited about so I would say we have a healthy pipeline on things that we are working through and I would say, it's not only another southern part of your question for Sue, but it's not only on the M&A front, but organically well. So organic we also have a pretty.
A good pipeline. So it's something we're still focused on we will try and have a balanced approach to capital allocation and continue to ex.
For the other leavers.
When and where we need to.
Great. Thank you for the color.
Thank you for so.
Thank you and the next question comes from James Faucette with Morgan Stanley.
Thank you very much just wanted to follow up on.
Most of these questions and particularly as you're thinking about how you are incorporating.
The stimulus and and as that rolls off and I'm wondering you know how you are taking into account things like or if youre seeing.
Visitor ship change to Puerto Rico, how youre, anticipating that maybe coming back or having an impact.
Looking at some of the other dynamics there can be a play particularly for that market.
Sorry, James did you mention that you mentioned visitors you mean towards visit yeah, yeah, tourism et cetera to Puerto Rico, and what's happening now how that's impacting your outlook.
No. It does I mean, and that's part of what I mentioned in terms of product mix, we've been now for a few quarters.
Calling the attention of a higher spread in our merchant acquiring segment driven by the average ticket, but also the product mix in the past few quarters since the pandemic, we've seen a lot more debit and then look more domestic transactions than we had in the past. So we're definitely as we move forward considering that those.
3 main factors will start to move towards normalization.
That's something that we've actually already seen and in the case of domestic vessels vessels lets say international cross border transactions that is almost.
Almost back to pre pandemic.
And numbers and the reason being.
Over the past quarter traveled to Puerto Rico has actually improved significantly I believe it's only or if we go based on numbers about 6% below 2019 and actually the month of June.
Believe it's 1 of the highest passenger months, we've had sent from the airport went private which which was close to 10 years ago. So we are definitely seeing from that tourists tourism come back and we are considering some of those kind of.
No 1 says that they change in.
Just in the overall economic and having said that remember that the recent for Puerto Rico is only about 5% to 8% of GDP. So so it's not a huge number.
And I think what we're seeing I mean, I think what we're saying to some extent is what the rest of the company country has seen is the stimulus money and as that rolls off it's the economy getting reactivated.
We are hopeful that with hurricane money coming in potentially with the infrastructure Bill coming through they will continue to see some nice tail winds the remainder of the year and going into next year, but again, it's hard to predict with Delta variant.
What will get and how quickly will funding come through Puerto Rico, but talking point tourism is back in Puerto Rico, but it's not a significant part of the island's economy, nor really our business per se either.
Yes.
I appreciate that and just trying to make sure that we have kind of all the pieces at least as complete as we can on that.
Hurricane relief and the infrastructure Bill are there any.
You know areas that youre paying particularly close attention to in terms of sizes are projected and other things that we're monitoring.
To that impact depending on obviously how.
That whole process plays itself out politically but are there specific projects or things that you are paying closer attention to.
Look I think the infrastructure Bill is unimportant 1 just because of its sheer size I would say that there are other projects that involve some of the aim for a couple of Medicare and social security parity for Puerto Rican which is something that we hadn't gone for there because I'm getting something that has gone back and forth in Congress.
A few dimes aim that if it does.
Go a day.
Aware, Puerto Rico, it should be incremental federal funding on a recurring basis going into the future. So I would say that.
That's an important 1 that we haven't necessarily discussed in the past that's out there and I would say just the overall progress of the reconstruction funds continues to be.
Something very important for us to attract as well as the reconstruction of the electric grid right. There were about $13 billion allocated towards adjusted debt the revamp of the agreed.
Even though that's not something that we were expecting or expect to see kind of impact the economy. In the next 6 months and it is something where Lala has been selected progress has been made on hopefully.
The government move fast enough to start putting some of those funds into the economy next year.
That's really good color. Thank you very much.
Thanks, Thanks James.
Thank you for the next question comes from John Davis with Raymond James.
Hey, guys. Thank you Hey, good afternoon guys.
Maybe if you could just help us a little bit what's the day.
The updated outlook, obviously, great to see the revenue raised by by more than the <unk> upside, but maybe by segment. I think you guys have laid out some kind of growth targets for the end of the year or what you are kind of modeling or assuming clearly those those have been upgraded but just curious maybe if you can't get by segment exactly like where the most upside is.
Or we should think about growth.
I mean, I think what we can do for us for for purposes of doing by segment. John is kind of gave where we expect to be top line growth for the whole year right. We don't give quarterly guidance and I think we already have always knew the first half, but as it relates to merchant acquiring.
Our expectation is given obviously the range will be kind of in the high teens to low 20 in terms of where that segment will be when we look at payment Puerto Rico we.
We would expect that to be in the high teens for the full year Latam. We would also expect that to be high teens low 20.
And then in the business solutions segment, we expect that still to be kind of low single digits.
We go into the second half in business solutions, we do have the headwind of the day by months allocation contract, which was again about for me on the orders in Q3 and that was pretty significant to both the topline and EBITDA because of how we recognize that net of expenses. So it was a pretty good contribution to margin.
And so at a high level, that's kind of the breakdown of the different segments.
Yes.
Okay, No that's exactly what we're looking for Super helpful. And then maybe just around Ath mobile just trends curious how that's trended during the reopening.
Seen kind of continued growth and traction within ath mobile and I apologize if I missed it and maybe any updated stats you can give around that would be great.
Yeah, so that we mentioned.
The early comment about a 60% growth for the quarter. So we are still saying and I think that alludes back to 1 of your colleagues questions.
I think Bob I mean, we are continuing to see very healthy growth in that and that.
Product line, it's not what it was 2 or 3 quarters ago, but we do think that that's a permanent trend where people will continue to use ath mobile and they will continue.
To use it for more transaction types, but it's not what it was the last couple of quarters, but 60% is pretty healthy given that we're sort of have come out of the lockdown.
Okay, Great and then Mark maybe a bigger picture of more of a philosophical question for you Leverages now turn out of house had headed towards 1 probably by the end of the year given.
The the <unk>.
Significant growth that you guys are achieving this year.
Assume youre not going to let leverage just continue to go lower.
And I understand M&A valuations are somewhat stretch so if I go back pre hurricane Yeah, 10 cent dividend.
I believe now it's 5.
You know a quarter.
How do you think about dividends versus buybacks special dividends something you guys would consider just curious on capital return for shareholders. How you guys think about it.
Yeah. So our number 1 priority is growth and we do and we think thats through investing in our business organically and in M&A. So that will continue to be our focus I think the balance sheet. We're in a great position to continue to invest in those areas and we do know the m&a's remains important for us so that will be our top priority is to continue to.
Though the company because we think we're building a unique franchise in Latin America.
That is unusual and is creating value long term for for shareholders. We do look at buybacks and we do look at dividends.
Wouldn't parse those out on this call.
To which we would we would move on in any certain direction, but our focus is growth.
Okay, Alright, thanks, guys.
Thank you.
Thank you.
That does conclude the question and answer session I would like to return the photo management for any closing comments.
Again, I want to thank everyone for joining the call today.
And we look forward to catching up with you in conferences over the quarter.
Everyone have a good night.
Thank you for the conference is now concluded. Thank you for attending today's presentation. You may now disconnect your lines.
Yeah.