Q3 2021 EVO Payments Inc Earnings Call
Good morning, My name is Julie and I will be your conference operator today.
At this time I would like to welcome everyone loved it at other payments third quarter 2021 conference call.
All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you'd like to ask a question. During this time press star followed by the number one on your telephone keypad, if you'd like to withdraw your question Press Star One again, Thank you Mr. Ed O'hare Senior Vice Presidents.
Investor Relations you May begin your conference.
Good morning, and welcome to Evo payments third quarter earnings Conference call, our press release and slides detailing the Companys recent volume trends are available on the Investor relations portion of our website.
Before we begin I want to remind all listeners that evo payments desires to take advantage of the safe Harbor provisions of the private Securities Litigation Reform Act.
Certain statements in this conference call such as projections regarding future performance, maybe considered forward looking statements within the meaning of the act.
Such forward looking statements are subject to risks uncertainties and other factors, which could cause actual results to differ materially from those expressed or implied by such forward looking statements.
For additional information on these factors please refer to our press release and filings with the SEC.
Please refer to our press release for an explanation of the non-GAAP financial measures discussed in today's call along with a reconciliation of those measures to the nearest applicable GAAP measures.
Today, we will discuss our third quarter results and our overall business performance.
Joining me on the call today is Jim Kelly, Our Chief Executive Officer, Tom Panther, Our Chief Financial Officer, Darren Wilson, President of the International segment, and Brendan <unk> President of the Americas segment.
I will now turn the call over to Jim.
Thank you Ed good morning, everyone and thank you for joining us today.
Evo delivered solid volumes and earnings this quarter as economic activity rebounded across our markets and accelerated card utilization continued.
As you can see from this slide the company demonstrated volume growth of 15% compared to the third quarter of 2020 and on a currency neutral basis revenue grew 14% adjusted EBITDA grew 25% and margin expanded 341 basis points to 38%.
We've expanded our margin by over 300 basis points for four consecutive quarters.
The excellent execution of the executive team and our global employees has enabled us to grow revenue at an expanding rate while also reshape our cost structure as we actively manage through the pandemic over the last 18 months.
We're committed to delivering positive operating leverage and increasing our margins while also investing in long term growth opportunities tomo.
Tom will cover our third quarter financial results in more detail.
Our financial results reflect our ability to execute on our well established bank referral and tech enabled sales strategies across both Europe and the Americas.
We continue to work closely with our international Bank partners to facilitate digital payments payments acceptance and.
And expand our geographic distribution as we enter new markets. Additionally, we are experiencing strong demand for integrated payment solutions throughout each of our markets and we remain focused on growing tech enabled referral network to capture the global shift of software at the point of sale.
Further we continue to address unique end market payment solutions for our global Tech enabled product suite, including new integrations, and our proprietary gateway solutions, including clear one in Spain way to pay in Ireland.
Systems in Mexico, Toggle for Zealand, Chile, and Anderson's acts in the U K.
By enabling frictionless integrations to any software solution, we gain access to the entire integrated payments addressable market enhancing our ability to drive outsized market growth for acquiring and payment processing.
In the U K, we recently integrated our Anderson Zac Omnichannel Gateway and now have access to more than 20 additional active IFC partners, whose legacy merchant portfolios. We are working to convert to Evo is acquiring platform.
Further we are deploying our sales and product expertise to sign additional IFC partners and drive sales for our business as we capitalize on the accelerated adoption of integrated payments, which is particularly strong across Europe.
Turning to Chile, I'm very encouraged by our early success in the market since commended commencing operation last quarter. Our strong sales efforts have enabled us to expand our merchant portfolio to more than 5000 customers.
As we move through the fourth quarter and into 2022, we're continuing to grow our business together with our bank partner Dci leveraging E. Those direct sales force and tech enabled capabilities.
Our tech enabled channel in Chile includes our recently acquired E Commerce Gateway in addition to a growing IFC network.
Brendan and Darren will provide more detail on our segment performance later on the call.
As the impact of the pandemic receipts, we will continue to grow our business through investments in our sales distribution, new product launches and M&A.
We are seeing increased M&A activity related to both bank partnerships and integrated solutions and we'll continue to pursue opportunities that meet our strategic and financial objectives.
We anticipate our strong momentum amid the global economic recovery will continue through the fourth quarter and into 2022, and we are confident that we will be able to execute our strategies and generate solid topline and bottomline growth.
Finally, as we announced yesterday I am very pleased to welcome Nicky Heartland until our board of directors.
Nicky currently serves as the Chief operating officer of parodies love. It there and was recently named to the 2021 list of Atlanta top 100 women of influence.
Our strong leadership skills and merchant experience will greatly benefit the board and the company as we continue to grow.
Now I'll turn the call over to Darren to discuss our European business Darrin.
Thanks, Tim.
To begin by providing some perspective on how Europe is successfully emerging from the pandemic.
While government restrictions remain in place through much of the second quarter and the third quarter vaccination rates increased restrictions are greatly reduced economic activity significantly rebounded.
Our markets are experiencing broad growth across most industry verticals, including travel and hospitality.
As expected to accelerate in 2022.
Good evening continues and trends continental travel and DCC activity increase.
These trends are reflected in our recent financial results, which now exceed pre pandemic levels.
For the quarter European constant currency revenue increased 16% year over year.
Volumes for the quarter was 16% higher compared to 2020 and grew 22% versus 2019 excluding.
Excluding the impact of the Samsung headwinds, which have now lapped European volumes and revenue grew approximately 30% compared to 2019.
Our strong financial performance demonstrates the success of our international strategy.
Fixed it.
Penetrated markets.
With our ability to capitalize on the recent macroeconomic tailwind and accelerated demand for digital payments.
We continue to execute on our proven business strategy is to grow and diversify our merchant portfolio throughout our European markets. As we work closely with that bank of columnists and leverage our rapidly growing tech enabled sales channel.
Across the segment, we now have more than 200 Tech enabled ferro partners and multiple gateway acquisitions, including IPG Clearone way to pay and Anderson Zhang integrated into our platform.
These tech enabled solutions together with our continued investment in market, leading products and capabilities have enabled us to sign merchants spanning multiple vivek cycles driving accelerated growth for our European business.
Beginning with island, we continue to work with bank of Ireland to grow market share and bring innovative products and capabilities to the bank's customers.
Over the last 18 months, we have established key end market relationships to expand gift card solutions as well as contactless and mobile payment acceptance I mentioned this.
This quarter, we also enabled Mastercard installments.
<unk> E Commerce merchants as we continued to expand our payments offering leveraging the cards buy now pay later capability.
Additionally, we are actively expanding our tech enabled referral network.
Evidenced by our strong e-commerce sales and the more than 20 in market <unk>, we have signed this year.
<unk> levels to attract new customers such as the large soccer stadium in Belfast This quarter.
We now have integrations to over 40, Isps in Ireland, which will continue to drive growth for this business as merchants continue to adopt software at the point of sale.
In the U K growth strategy centers on Tech enabled solutions that capture the accelerating shift to integrated payments given the relative maturity of the payments market.
This quarter, we completed the integration of <unk> and our recently acquired Omnichannel payment Gateway, which will augment our integrated payments offering in the UK and Ireland and expands our tech enabled referral network.
We now have over 75 integrated payments and I mentioned portfolio that exceeds 35000 customers.
Actively signing new Isps and merchants as we continue to grow this business.
Today, our combined Irish and UK business represents 22% of our European revenue compared to 8% in 2017.
Year to date. This business has demonstrated strong revenue growth of greater than 30% with a significant portion driven by our tech enabled channel.
Turning to our central and eastern European business, which is anchored by our joint venture with Pks in Poland.
<unk> strong sales results by working with our banking partners and expanding our tech enabled referral networks as we increase our market share across this under penetrated region.
Today, we have over 100000 merchants in central and Eastern Europe, which represents approximately 50% of our European revenue.
This quarter, we continued to expand our relationships with many of our Polish merchants.
Signing additional locations in Poland, and the Czech Republic, as well as surrounding countries, including Hungary, and Slovakia among others.
We have demonstrated accelerated growth from our tech enabled channel by signing more than 20, Isps This year, which focused on serving merchants, both the physical point of sale and ecommerce.
Last month, we added three new E Commerce partners and launched our integration to a leading pharmacy software provider in Poland.
Our tech enabled revenue is growing more than 20% and now represents approximately 40% of our business in the region.
Looking into next year, our business is well positioned to deliver high teens revenue growth as we expand our merchant portfolio through our product capabilities and very best referral networks.
In Germany, we are growing our tech enabled network to approximately 20 referral partners.
This quarter, we signed an agreement with pay to provide gateway and acquiring services for the payments platform.
So paid connects international customers to retailers across Europe.
<unk> merchants to accept international E wallet payment methods.
Physical point of sale and online.
Lastly, turning to Spain, we're seeing strong business momentum in this market and third quarter volumes were up 18% compared to 2020.
The headwinds from Santander and the pandemic are largely behind us.
We remain focused on augmenting our tech enabled channel, which now leverages more than 60 active Isps and E Commerce partners connected via Omnichannel platform.
We also continue to work leave it bank to expand our merchant portfolio, which delivered steady sales growth even through the height of the pandemic, we believe our ability to execute on our strategies will enable us to return to historical growth rates.
I am very pleased with the economic activity across Europe, and a strong business execution in the third quarter.
Europe continues to reopen and cross border activity, including DCC returns, we are well positioned to deliver additional revenue growth and margin expansion for the segment.
I will now turn the call over to Brendan who will provide an update on our Americas segment Brendan.
Thanks Darren for.
For the quarter, the Americas constant currency revenue increased 12% year over year, which was driven by 15% volume growth in the quarter. These results were largely attributable to growth from our international bank referral channels and our tech enabled businesses across all markets.
Beginning in Chile as previously discussed Evo is now fully operational and delivering leading acquiring services and payment solutions to the market. We have worked with our bank partner Dci to generate strong sales results. Since we commenced operations in June we continue to cross sell acquiring services to.
The bank's initial targeted customer list of 15000 merchants, which will strengthen the bank's existing customer relationships.
And our tech enabled channel, we are leveraging our <unk> acquisition, coupled with our sales expertise to accelerate e-commerce growth for our business as we also identify local isps with which to establish integrations and referral relationships consistent with our international sales strategies.
We anticipate our partnership with PCI and Tech enabled capabilities will result in a business that generates over $25 million of revenue within three years.
Turning to Mexico.
Our volumes increased 23% this quarter compared to last year, and 15% compared to 2019 I continue to be pleased with the solid growth from our bank and tech enabled referral channels as we continue to deliver strong sales in the market, including the recent signing of several large merchants across multiple verticals.
Including healthcare and online retail and.
And our tech enabled channel, which includes <unk> and E. Commerce revenue was growing 40% this year and now represents approximately 20% of our Mexican business.
Our total merchant portfolio grew 10% over the last year and now exceeds 200000 merchants further demonstrative of the health of the market and our ability to increase market share across all of our sales channels.
In the U S volumes for the quarter were approximately 7% above the prior year, which was driven by our <unk> and <unk> business units <unk> and ISP together grew in the mid teens this quarter and today represent over 40% of our U S revenue.
Specifically in our <unk> business, we signed a significant number of new referral partners to expand our <unk> network and capitalize on the low carb penetration of this fast growing market. We also continue to cross sell acquiring services to our proprietary pay fabric gateway customers and expect the success of this conversion.
<unk> to accelerate as the impact of the pandemic moderates.
We remain focused on growing our <unk> business through organic sales expanding our referral networks investing in proprietary products and capitalizing on M&A opportunities, particularly additional ERP integrations.
And our ISP business volumes have continued to improve as merchants migrate to the software at the point of sale and consumer demand for hospitality services rebounds.
We recently established integrations to international Isps, such as infinite peripherals, which will expand and diversify our merchant portfolio.
As we work to meet the changing consumer demands that have remained in effect since the beginning of the pandemic. We will continue to invest in our capabilities and expand our referral network to support the growth of this business.
I am pleased with our third quarter performance, especially our growing tech enabled business, which is not only a strong sales channel in the U S, but in Latin America as well.
We are continuing to invest in our Mexican platform and strengthen our infrastructure to support growth in this market. In addition to Chile as.
As we expand our presence in Latin America, we will also look to grow our merchant portfolio by entering new markets with strong growth opportunities leveraging our tech enabled referral networks and international Bank partners with that I will turn the call over to Tom who will cover the financials in more detail Tom.
Thanks, Brendan and good morning, everyone for the quarter on a currency neutral basis revenue increased 14% and adjusted EBITDA increased 25% and margin of 38% expanded 341 basis points compared to the prior year.
Further compared to 2019, our third quarter revenue grew 10% and adjusted EBITDA increased 22% as our margin expanded 351 basis points.
These strong results are despite the significant strengthening of the US dollar during the quarter, which adversely impacted revenue by approximately $2 million.
We again generated record volumes this quarter, which increased 16% compared to both 2020 and 2019.
Sequential revenue spreads increased this quarter due to merchant mix and the seasonal increase in cross border activity.
DCC revenue increased 24% compared to 2020, but remains approximately 40% below 2019 levels.
We view, both spread improvement and DCC revenue as opportunities for additional revenue growth of over $20 million in 2022.
This quarter's solid results demonstrate the company's ability to generate strong top and bottom line growth as economic activity gradually normalizes across our markets.
We remain optimistic that these trends will continue as we leverage our capabilities to capitalize on the continued cash to card tailwind that it persisted coming out of the pandemic.
With respect to segment performance in Europe, our year over year constant currency revenue increased 16% and adjusted segment profit increased 18%.
In the Americas year over year constant currency revenue increased 12% and adjusted segment profit increased 20%.
Adjusted corporate expenses for the quarter were $10 million, which decreased 5% from the prior year, primarily due to the timing of various accruals last year.
Adjusted net income for the quarter increased 44% to $26 million compared to last year and adjusted net income per share for the quarter was 27.
Which increased eight.
Or 42% compared to a year ago.
At the end of the quarter diluted shares totaled $95 million, an increase of $1 7 million weighted average shares compared to the prior year.
In the third quarter capital expenditures were $6 million versus $4 million in Q3 2020.
Of this amount 78% was for terminals as our markets continue to reopen and board additional merchants.
Free cash flow for the third quarter increased 33% to $40 million compared to the prior year, resulting in a free cash flow conversion ratio of 77%.
This was driven by the company's record earnings and lower interest expense.
We ended the quarter with leverage at two two times, which is down from two six times at the end of the second quarter.
We also just completed the refinancing of our term loan b and revolving credit facility, which was set to mature in 2023 by entering into an all bank term loan and renewing our $200 million revolver, which now mature in 2026.
These new credit facilities, lower our interest cost a full percentage point and enable us to retain the same flexibility to access additional capital to support M&A opportunities for the next five years.
Turning to our outlook, we anticipate full year revenue growth of 13% to 14%.
1% to 22% EBITDA growth and 200 to 250 basis points of margin expansion.
These results reflect our strong third quarter business performance and assumes FX rates remain consistent with the prior quarter and strong consumer trends continue in our markets.
With that I will turn the call back over to Jim Jim.
Thank you Tom I am pleased with the company's performance. This year as we have successfully executed our business strategies.
Revenue and EBITDA growth rates have increased our margins have improved over 300 basis points.
And our balance sheet is extremely strong.
As such we remain focused on delivering consistent growth and expanding our geographic footprint and tech enabled businesses.
We have solid momentum heading into 2022 and are well positioned to continue to deliver strong financial results through organic sales and capitalize on additional M&A opportunities.
I'll now turn the call over to the operator to begin the question and answer session operator.
Thank you at this time I would like to remind everyone in order to ask a question Press Star then the number one on your telephone keypad.
And your first question comes from George <unk> from Cowen. Please go ahead.
Great. Good morning, guys and congrats on the solid results nice to see the momentum.
I guess, thanks, Joe My first question.
Tom you talked about the DCC opportunity that that still sort of ahead of you potentially another $20 million if it gets back to 19 levels.
For <unk> can you give us a sense of the distribution kind of by concluded that sensitivity, meaning how much of that is really Poland versus our.
Geography, like like Spain, and the like just any sort of clarity around that would be helpful.
Sure Hey, good morning, George So the majority of that as you would expect is Poland.
Given that it's a significant portion of our European business, we do expect to see increased cross border activity, our domestic card activity in Poland was about still 90% domestic so there is still an opportunity for more international and European Cross border activity that.
We see going forward, but as you heard in Darin <unk> comments, we see a lot of opportunity in Spain. We have the same 10 dare matter that we've lapped and we think there's some really good growth opportunity within Spain that will also add additional DCC momentum now one just.
To clarify the $20 million that I referenced was a combination of both improvement in DCC as well as where we expect to see spreads.
Continue to migrate up into 2022 based on transaction mix in merchant mix I just wanted to clarify that you didnt attribute all of that to just DCC. There is a component of that that is spread improvement.
Really appreciate that color, Tom and then.
Jim I know on the last call we were seeking out your.
Expertise on a lot of things happening real or perceived in the.
In the payment space.
Just curious given your experience given you guys have.
Our big European business.
I'm curious, what you're seeing with alternative payments specific two things.
Things like account to account based payments, which I guess with open banking might be a little bit more prevalent there relative to the U S is that is that encroaching on the business at all are there opportunities for you guys to participate in.
And things like that and then maybe as a as a.
Quick follow up.
Obviously the balance sheet is in good shape anything you can say around M&A and maybe how valuations are current route for some of the assets that you're interested in thanks, again and I apologize for the long winded question.
No George your questions are much appreciated.
So Darren for the first time in about 18 months is actually sitting in the room, we've been doing this by pointing to each other over the screen.
Screen previously so I'm going to let him take part of it.
I think as you guys see these headlines weather last time. It was buy now pay later or hear bank to bank transfer.
I mean these are trends that are appearing in the marketplace, but the entrenched.
This core visa Mastercard and the other cards.
Our job is to support the real estate in front of the point of sale. So it really.
It doesn't really matter to us at the end.
What the merchant wants to.
Transact as long as it's running across our rails.
In some way or fashion. So we have we have seen probably more in Europe, eastern Europe and Western Europe.
And interest in bank to bank transfers.
Which to US I mean, I guess the equivalent to the U S would be kind of an <unk> type of.
Transactional I think this is more real time than an acre which is delayed.
It's super early days, so I would not.
I would not be overly concerned that it's going to have some material impact in the near term.
And the other piece is we've seen visa Mastercard Mastercard made an acquisition in this space in Europe.
My expectation is that Youll see those big brands.
Find a way.
To be relevant in that space and.
Those are the primary relationships that that we support bell it.
Darrin amplify something then I'll come back to M&A Darrin.
Thanks, George Yes, I think James covered at Ulta.
Ultimately, yes in eastern Europe, we're seeing great traction through the online channel. So e-commerce, where there's kind of a button to adopt and account to account type payment.
It's not getting any traction in the card present space as you'd probably imagine because if kind of the.
The friction to try and do that and they kind of muscle memory of paying by card or an E. Wallet type transaction. So we're seeing some intra into E. Com, it's not material that said, we see the trend we've been working on ensuring we play in that space and ensure we participate in the economics of accounts or account.
We're.
We see that growth opportunity.
It's not it's not denting the volumes, yet, but we will we'll have a footprint to capture those transactions in future.
To draw somewhat of a parallel bank to bank transfer, but theres a domestic scheme in Poland that was getting launched at the time, we entered Poland in 2013 at the end of 2013, it's called Blake.
In Blake's been single digits since 2013.
<unk> seen an uptick with e-commerce.
Since the pandemic, so I don't know if its out of the single digits yet but.
It has been a long runway I mean, almost eight nine years before it's become.
Beginning to be relevant in the marketplace I think bank to banks, probably got some time to.
And there's a scheme called <unk> in Spain, as well Scott.
Over 10 million registered users.
As in consumers, but similarly volumes small at the moment, but exclusively online as well and we also play in that space in terms of accounts capturing business transactions similar to Blake.
Banking, though across the rest of Europe really is an account information service rather than the payment information service at this stage.
We're not seeing any real traction in the U K, Ireland and other western markets.
And we have to remember the benefits of visa Mastercard Chargeback rights all the rest.
30 days of credit.
That is still a incredibly compelling solution for consumers. So at the end of the day, it's not our decision or somebody elses decision. It's the consumer's decision as to how they want to transfer transact business and yes.
I am still extremely bullish on the major brands continue to be incredibly strong for a very long period of time.
And then on your second question as Tom said and we're very very pleased at where we are on on leverage I actually I think George It was one of your notes pre pandemic that highlighted that we were north of four.
So to see us down almost below two.
2122, I think is a testament to the management team and the efforts we did bring in additional money before the pandemic.
Not knowing how long and how deep it was going to be but there is a lot of effort that was taken across the company to take the tightened the belt during COVID-19 and coming out of Covid and this was my <unk>.
Expectation is that we'd be well positioned to take advantage of M&A.
As I mentioned I guess it was sometime last year. This time about it's difficult to do M&A when people aren't traveling but as we see domestically and internationally people are starting to travel again, and we are definitely having a lot more conversations on the M&A front you saw we closed a deal in Chile.
For a gateway last quarter.
And my expectation going into the balance of this year and definitely into next year that will be coming to market with more M&A announcements.
Really appreciate the color and congrats again on the quarter Nice nice results.
Thanks George.
And your next question comes from Tien Tsin Huang from Jpmorgan. Please go ahead.
Okay.
Echo what George said good results here, it's good to see some.
Some clean numbers.
On the volume side I, just wanted to make sure given what we've heard from your peers just from a.
Surprise standpoint month to month intra quarter any.
Change or anything concerning.
I would say around October everything it looks pretty consistent.
To make sure if theres been any surprises from a macro standpoint.
Good morning, Tien tsin. Thank.
Thank you no no surprises honestly, we're trying to win the market off of US publishing volumes every single month.
Did that in the beginning because when we first had COVID-19.
We did the raise I don't think the market appreciated how severe it wasn't because we are heavily international 65 plus percent international.
The European market were seeing I think it faster than clearly Mexico and the U S. So that was that was the catalyst to start <unk>.
Reducing the slides we didn't put October on October was sequentially stronger.
Then September by a couple of percent. So actually October was a very good months. It's one of the reasons we feel.
Good about the quarter I mean, FX is obviously out of our control.
All the news that we're seeing about supply chain issues and holiday issues. So there still is a potential headwind in the world relative to that but where we're sitting today, we the fourth quarter and going into next year feels good.
Okay.
Great to hear great to hear and my quick follow up is just on margins.
I'll ask <unk> bin.
Just like you said on the leverage front, you've done an amazing job getting cost down and producing.
Strong margin here any change in philosophy as you go into 'twenty. Two do you feel do you need to invest more.
Aggressively or can we assume that lower cost baseline here is.
Sure.
Yes.
Yes, I remember for the last 20 years and then the question on margins.
Margins I feel like we operate the company as we try to operate the company as efficiently as possible obviously.
<unk>.
Over the last 18 months not just on the payroll side, which we've already announced but on the non payroll side, we found ways to be more efficient reduce expenses reduce reliance on third parties that were.
Either part of legacy Evo or part of some of the companies that we acquired.
And so largely what you're seeing is permanent.
Reduce the expenses and as the company continues to get bigger.
As we make more acquisitions.
I don't see the margin goes up indefinitely, but I don't see pressure on the margin line and I think the other important feature it's not like we're starving off.
We like everybody else is somewhat challenged in filling open positions and it's one of the things I get feedback from the Vps and the Gms, who run the business day to day, but.
It's competitive as we can be.
On.
On salaries and attracting talent in.
So maybe we'll see some incremental cost increase as we add more positions, but the company is not starved for employees and as you see on the capital side and we're continuing to spend money.
<unk> terminals, because the business is coming back pretty aggressively I think the other benefit we and everyone is benefiting from is that theres more spend on card as a result of the pandemic. So we're just a bigger company not necessarily more merchants in the aggregate, but just a bigger company because consumers are spending more and spending more on a car.
Art, just drives a greater margin for us so relative to your first comment I am Super.
Impressed by how the company has performed on the margin line I remember going public enduring.
The early days of the IPO that was the question we got wires our margin so low why our margin so low relative to the bigger guys and I would say they are bigger guys.
But we're within spitting different distance of <unk>.
Companies that are multiples of our size. So I think we're running a really efficient place right now.
Good stuff thanks, Jim.
Thanks.
And your next question comes from Andrew Jeffrey Suntrust. Please go ahead.
Hi, Good morning appreciate you taking the question.
Jim I think sort of following on to contingent question, where we're clearly seeing a lot of noise.
Noise in the market just around I think differentiation of some of the more legacy players and one of the things that consistently jumps out as I listen to you talk about your business as the.
The focus on tech enabled and specifically the gateway strategy and I Wonder if you could just spend a couple of minutes talking about how you think.
<unk> is positioned in the market, especially in the U S and in North America, and how maybe some of your tech enabled initiatives absent owning vertical market software for example, distinguishes the company and improves your competitive position, perhaps relative to peers.
Yes.
Okay I may do this in tandem with others Brendan since he has the Americas.
Yes, I think relative to our peers in the U S. Our peers in the U S are massively bigger than way and very successful companies.
Firstly, thank the reaction in the market has been a massive overreaction. These are very.
Well and trends strong.
Companies with lots of technology and lots of capabilities, so difficult to compete against.
We have positioned.
The U S. Around Tech enables you said through an acquisition or a series of acquisitions that piece of business that we are.
Or the two pieces of business that we're most focused on is our ISP business, which was based out of Tampa, which was through the Sterling acquisition that has grown multiples of where it was when we first acquired it and then the one that's even more impressive is our <unk> business, which is based in <unk>.
Denver in Anaheim.
And focuses on the receivable side and we've said this many times before I think.
That has been and is going to continue to be our primary area of focus.
For our U S business, because that's what consumers are looking for in particular on the <unk> space. We have made a series of acquisitions and I think we're going to continue to we have a differentiating product on the Microsoft plug ins on SAP.
On Oracle these are sticker stickier and larger customers customers the size of Levi's SAP as a customer.
Fuji films as a customer and I think that's that's how we at our size with our bank relationships in the U S. We have outside the U S.
That's how are youre going to see us continue to grow in a meaningful way domestically.
The other gateways, we mentioned in the script, what we have learned.
Over time, where we originally started with a U S snap gateway for Isc's, we've supplemented that by buying into smaller ones. Anderson's Axa really good example, as Darren mentioned in his speech. This is something we chase for a number of years it's.
Scott on over 1000 customers already connected to it over 20 <unk> connected to it I think in total were like <unk>.
<unk> 40, or 50 Ics in the UK market that has been an incredible bright spot for us in terms of its growth rate actually the U K market is almost as big or not or bigger than our Irish market and it does not have a bank partner.
<unk> U K business think of the old Mercury business in the U S. On the ISP side, we're essentially just taking that playbook in each of these <unk>.
International markets and taking the learnings from the U S from our ISP business out of Tampa and using that as a way to.
To teach our gms internationally, where new opportunities are besides just relying on financial institutions.
I covered all of it Brendan if you wanted to add something to that.
Maybe Chile, no I mean, I think I think Jim.
Hit the hit the question head on.
What we're trying to do not just limited to the U S, but globally as build distribution and.
Our entre to the market.
Distilled the strategy and make it very simple we go into a market with a partnership through a bank. The bank provides us a brand we don't call ourselves, even though evo we brand ourselves under the bank.
Bank, it's corporate bankers and retail footprint constitute our initial distribution.
And then we immediately follow that up by introducing our other sales capabilities and products at <unk>.
And we try and buy a gateway in the market because that gateway accelerates our integrations to Isps that have a significant presence domestically in whatever market, we're talking about in those <unk> and vars and resellers become an extension of our distribution.
And we think that.
And many of these international markets, we're not competing against the great companies domestically here that Jim referenced earlier, we're competing against financial institutions that aren't otherwise super focused on.
Innovative point of sale solutions.
So that the list that that Jim referenced earlier Anderson Zacks clear one in Spain, <unk> in Mexico, the Lego and notice here domestically.
<unk> in Chile. They are all a replication of the exact same strategy that we talked about it all day everyday here, how do we build distribution in a scalable way that doesn't just constitute hiring more heads because this allows us to <unk>.
Attract a lot of a lot of merchants grow the topline grow volume and not grow our head count which creates the EBITDA margins that we all enjoy.
I just wanted to add one other component to this.
As he is Brendan just described going into a market again, we will use Anderson's acts or we could use sfas in Mexico.
Going into those market and we have two options go in with our own software.
Slash by somebody in the market and now we're competing in a channel that is not core to our company will go into a market and try to partner with everyone and maybe we have to give up 10 or 15% of our revenue, but we're not giving up 99% of revenue what you would see in a payback model with somebody like.
A toast or some of these other companies that have been enabled over the years to to basically harvest the value of processing the payments.
<unk> of it as opposed to making money on software. So we're partner with software companies, where we keep the majority of our revenue and just like a sales commission.
We pay them a sales commission for referring business to us and that model has been replicated country after country after country.
And again I think it would be naive to think that I can develop a software in the United States that is going to be ubiquitous across the world. There are software everywhere everywhere. We've gone there is the point of sale infrastructure that is already in place.
That's the model internationally domestically, we do the same model on the IC side and a very heavy focus on.
<unk>, where we do differentiate by buying software developing software as plug ins to ERP systems and.
We're seeing dividends from that strategy as we said in the script the growth rates of those businesses far exceed the total growth rate of the company, which over time will pull the growth rate the company up.
Beyond where we are currently long winded answer, but hopefully that answers your question.
Yes, it does super thorough thank you.
And your next question comes from Bob Napoli from William Blair. Please go ahead.
Thank you good morning.
Everyone.
Yes.
Maybe along the same lines.
But.
How do you feel about the growth outlook for Evo today, you've got public four years ago.
Based on our model.
That you would put out there the market is kind of saying that there's been a lot of new technology in that.
Some companies the stock when your stock is kind of flat from four years ago.
Youre not going to be able to compete against that new technology, it's going to take market share, but how do you how do you feel about <unk> market position versus the.
The new companies that are out there in your growth opportunities and the growth model.
Versus when you went public four years ago.
Yes, I like my model I mean, I can't speak to why the valuations that I see in the marketplace for companies that lose the amount of money that they do and have valuations that have a lot of zeros behind them, but our strategy is is I think well documented as we've just described here.
<unk> I think this is a superior strategy on all levels and thanks.
I think we have a lot of investors, who are U S domiciled, where maybe banks have become less relevant to the payment market, but 65% and growing of our business is outside the United States, where banks are still very.
Very relevant or branches are still relative relevant businesses dunaway differently than say, it's done here in the United States and the Tech enabled piece that we just described is very vibrant is growing is very low penetrated.
Outside the United States So.
So inside the United States, we're not competing against some of the businesses I think that you are.
You're referring to relative to recent valuations, we're focused very narrowly on a <unk> space, which has 24 trillion as they say of opportunity, which will float a lot of boats and an ISP business that again is not based on owning software because.
My experience has been software in it of itself is not making any money they are making money on the payment side and I think the mistakes that some people have made has enabled these software companies to make all their money on the economics of the infrastructure and the cost of companies like us have to bear to run our businesses.
We're not competing against a lot of the companies that you are referencing.
We're not referencing but you're I think referring to because we're domiciled in Chile, and Mexico in countries across Europe, where we're not seeing the.
The phenomenon that maybe is more prevalent here in the United States, but I also think there is a test of time, let's see how these businesses do over the long haul do they morph into something else.
Or because at some point they do have to make money.
They can't just grow for the sake of growth they have to be able to provide a return to shareholders.
And wanted to feed that some of the feedback that I got when we went public was about not just growth, but margins and leverage and all the rest and those other ingredients of the company have been.
More than addressed and Youre seeing our growth continued to accelerate and thats going to continue because what evo started with was a small <unk>.
Sales organization based in New York that was a traditional ISO model that all U S companies that are in our payment space have some remnants of and it's still not an immaterial piece of our company is still a resident.
In the U S, but outside the U S. As you saw in the numbers now some of this is a bounce back from Covid, but all our numbers are pointing in the right direction and I feel very good about competing against any of the companies.
Domestically or internationally I don't see any concerns.
Thank you and then just a follow up.
Tom.
Would you want to give any color on growth rate into 2022, I mean, you seem pretty confident assuming.
Kind of a stable recovery from Covid.
Yes.
Would you expect.
Growth rates to accelerate from here.
And just any color you can give someone it seems like you're very confident on margins and so may be steady.
<unk> margin increased but just any thoughts around the revenue growth in 2022 would be helpful.
Sure, Yes, well first comment on the macro economic environment I think we expect for there to be a strong macroeconomic environment in 2022 pandemic appears to be abating vaccination rates are increasing.
Governments and consumers are getting a strong footing underneath them. So I think the macroeconomic environment. I think is encouraging we said a couple of times that the cash to card tailwind seems to continue to be at our back we would expect that to be sticky.
I mentioned earlier in terms of the level of cross border activity that we expect to.
See an improvement on as I said domestic.
Volume was around 90% in our European market.
Historically it would have been.
We would have seen.
A higher level of international and cross border activities, I think DCC will be a benefit to us. So we think theres a lot of macroeconomic as well as energy industry specific opportunities in front of us and I think that bodes well for the growth potential of the organization.
I think.
Obviously this year, we're at that $13 $14, 15% growth rate will be all coming off of a tougher comparable obviously in 2021, but if historically we were eight to nine I think going forward with.
With those tailwind you could see us above those historical levels on a on a go forward basis hard to predict where we sit here today, but that would certainly be our expectation that that you would see a rotation up from those historical.
Topline growth rates that that would be created.
Created before yes.
Just to add to that one of the things as I. Just mentioned has that has kind of held back our overall growth rate has been the legacy Evo business, we refer to as traditional but our ISC in day to day in particular <unk> has grown.
Five times the size six times the size probably more than when we first acquired it from Sterling and added some acquisitions. So those businesses are now over 40% of our U S business and as they continue to get bigger and I think <unk> is probably the one where we have bigger opportunities or better opportune.
Please for M&A.
As that becomes a bigger part and it plays a bigger role in.
Payment commerce in the U S. Then youre going to continue Youll see we will see the U S business accelerate European and Latin America is already where wed like it today, it's really the U S that we've been working on trying to move it up the chain.
Great. Thank you really appreciate it.
Yeah. Thanks, Bob.
Your next question comes from Ramsey El <unk> from Barclays. Please go ahead.
Hi, gentlemen, thanks for squeezing me in here I wanted to ask about the Americas segment and how much revenue you generated in the quarter from from Dci and Pago <unk> Gateway I'm, just trying to get a sense of the underlying U S. Mexico performance versus sort of what was incremental or new this year.
Okay.
Okay.
Yes, I think you would see in the quarter the revenue from <unk> and Pago for sale was relatively immaterial I mean, I think we really only started boarding merchants in earnest in the second half of September through the JV.
October.
I will say we.
We are the beneficiary of a very very engaged bank partner there and so we've pre screened I think in the script, we said 3800 accounts.
We have very lofty ambitions in terms of the number of merchants. We think we can board between now and year end and they have a very significant foothold in the corporate banking segment. So some of these merchants could be considerably chunky in terms of volume and profitability.
But in terms of contribution within the quarter.
From from the JV relatively immaterial and then the Pago fulfill gateway, while profitable and attractive is also relatively small at this stage as well.
Yes, I think Ranjan, Tom I think the story around <unk> in Chile is really a 'twenty two story as Brendan said I mean, you are talking single digits.
Low single digits on the revenue contribution measured in millions from from the business, obviously just getting.
Started down there, but we do.
Have expectations from a revenue perspective, youll see that and accelerate significantly in 2022 and beyond and.
And Brendan script, even commented on how that business, we think can grow significantly over the next three to five years.
Okay generate outsized.
Revenue growth.
For us.
Great So strong organic drivers this quarter.
Rather than anything sort of newer incremental or inorganic driving maybe I appreciate that.
One follow up question for Jim or maybe not necessarily for Jim However, or whoever to that Andrew you mentioned, enabling Mastercard installments in Ireland and I was just wondering if you could talk a little more about that implementation and maybe the opportunity to roll that product out more broadly across your footprint and if you wouldn't mind also just commenting on your updated view on buy now pay later.
General how it's evolving how you see it as an opportunity or a potential challenge for the business specifically.
Well there. It is here he is not Irish English, but he goes there are a lot and so I'll, let him answer the Mastercard and I can I guess, we can both talk about buy now pay later.
Sure. Thanks, Jim.
So I must call installments is purely the mastercard, ensuring that they can support their share of banks with installment solution.
Solutions or buy now pay later, if you want to label it but really more an installment product of ensuring that.
They play in the market and we wanted to be front and center with them in terms of ensuring the integration that we've got that functionality and capability clearly.
At the minute so fashionable.
Time in terms of.
Consumers seeking installments for a myriad of products rich.
Some of it is.
Questionable I think in terms of taking your groceries on three months installments et cetera. So I think there's a lot of froth in the market, but I think in terms of having a stable secure legacy future.
Future product in terms of enabling merchants is important to partner with Mastercard on a robust installment solution.
Yes.
Buy now pay later is not limited to the U S and when we.
Someone to get to visa Mastercard or at least for debit transactions. So they're going to ride the rails of the companies that have made the investment otherwise they have to spend a fair amount of money to stand up for themselves. So I think on both ends whether it's processing for them or it's at the point of sale.
I don't I, just see as another tender type I don't see it as is.
Is a threat to the industry.
And just one more clarification will so we've been able to in Ireland for E. Commerce transactions, we can take it across several European markets.
Via Germany, UK, Spain et cetera. So.
It's an important engagement with Mastercard that I think continues as Jim says embedding is with.
The schemes to support this transaction type.
Got it very helpful. Thanks, so much.
And your next question Ashwin survey.
Citigroup. Please go ahead.
Good morning, gentlemen, good courtroom.
In design.
No.
Sure.
So.
On the bank respecting I just might look like.
And Ah D propensity continued doing.
Continue doing bank partnerships in the pipeline from the bank perspective, what has changed over the last.
A day.
I appreciate you know some snack yeah.
And you're more with the neighborhood product how does that play nations within the pipeline look like.
[noise], Okay, I think I've I've mentioned this prior but I think base do this for two reasons do this meaning form a relationship with a third party, it's not uncommon internationally for banks to have partnerships with a variety of different.
Companies that have specialization in anything from payments to insurance.
And I think they do it for two reasons one in the case of a bank that needs to raise capital.
As a process to look across the bank as two ways to raise capital versus just selling stock and you know in the early days of egos International expansion.
We capitalized on that coming out of the 2010 crisis and in particular in Europe, and I think even in Latin America to some extent.
And the last several years Prepandemic and I think we're seeing it again now it.
It has more to do if they don't need to raise capital is capabilities. So it cost a lot of money to build companies like evo or global or.
Et cetera and.
The the ability to replicate it.
Not impossible, but for a financial institution it would be a very big undertaking I think they would have to buy somebody for that to to be able to get to market in any reasonable period of time.
And the model works I mean, it's been working since first date acquainted back in the late nineties and into the two thousands mild company global payments has been extremely successful continues to be successful with it Ah vantiv. When it was doing it and now is starting to see it with some European players so because it works and is.
Worked in Canada, or the U S Asia Pacific in Europe, Latin America, and I think the stigma of Oh I'm going to have a partner who is going to touch my accounts just like I touch the same customers I think that's gone and now the reputation that our company has we've got $150 16 of these relationships spanning several diff.
Confidence.
That gives somebody.
A level of comfort that they are dealing with an organization that knows how to appropriately build a business together because it's not all about US is Brendan said our model is to leverage a variety of things one of which is the bank's name and that's an important distinction in our approach.
Is going into a new market, where nobody knows who Evo is we go into Ireland, and where where the bank of Ireland payment acceptance or we go into Europe, Czech Republic, where we're aligned with rifles and bank and we're called repo or for for Raiffeisen in Evo for our name.
And I see that as I said earlier I see that starting to accelerate there's still lots of banks in the world that.
Needs to be relevant in the digital world and that's something that we and people like us have the ability to do where someone who is like a square or.
Others, who are competing for banking services, they're not going to be interested in partnering with somebody who otherwise wants to offer a service that the bank is otherwise.
Used to doing so we are very clear with financial institutions that we stay within our lane, we do what we do and they continue to do the other 30 or so banking products.
The second question I, just could you do mine my credit courses debit by G M and your footprint getting a few questions.
Hey, Ashwin, it's Tom.
So as you would expect in Europe, it's heavy debit market is probably over 80% debit market within within Europe within the U S. It's kind of the reverse but not quite the same level, 70% credit we've actually seen the credit market car type actually move up recently.
Something I think that does influence our view around spreads and then within Mexico. It's.
Credit market is 40, 50% of the of the business. So it's a bit more balanced in Mexico between credit and debit and then as I mentioned earlier Europe as heavily.
Debit card related based.
Thank you guys.
Okay. Thanks Ashwin.
Yeah next question comes from.
Some might call Sweet search. Please go ahead.
Good morning.
No you've answered a lot on acquisitions and I'm wondering if you were seeing any change in who you are competing for those acquisitions were especially since some of the valuations at least on the public's ire coming down and I'm wondering if that's changing.
Peoples.
Who who might want to compete for some of the acquisition one.
So I don't think well thanks kartik.
I think I answered that question somebody else asked for something similar so.
He gets a fair proxy but.
Where we trade in the marketplace tends to to some extent drive what banks think their businesses might be worth there.
As other dynamics and play and yes, as the industry's trended up over the last many years.
I think it has driven up the prices for.
Either requiring a business and an alliance structure or in a joint venture straw.
Structure.
But they going in price relative to the things that both Brendan and Darren have described with making other acquisitions in the marketplace integrating to our fixed infrastructure of back end systems are back in in front end systems. It still provides a tremendous amount of leverage.
But I think for for now I don't know that the prices because the impact as to our stock prices in our in our sector of the industry.
That hasn't moved down pretty significantly recently I don't know that that's translated into.
What what the price for the next bank Ah relationships going to look like I think it will have a bearing.
On it but these relationships take a very it's like a marriage as I've said many times. It takes a long time to put together your date for a while before you are in a room talking about contracts and the like but yeah. They would take.
They take a variety of things into consideration and clearly public.
Public multiples are part of that analysis.
And then just a follow up I Dunno, Tom O'brien, you talked about the Chile business and I know I think Tom. He said really 2022 use is you should start seeing some acceleration I'm wondering from margins standpoint is that business is similar to kind of the margins you see in the Americas, where is it different.
Yeah.
As for the question Karthik.
So.
We run the the company in one hub-and-spoke model, we have kind of two big hubs internationally, we have.
Worse off of the European business in Mexico City for the Latin American business and what that allows us to do is populate our in market businesses.
With sales initially so basically exclusively sales.
And then.
Over time will move customer support and market as the business skills, we are going to be a processing the market or we are processing the market Alfaro Mexican platform, which essentially has no variable cost per transaction are very very little variable cost per transaction.
So listen we may lose a tiny bit of money and for the first couple of months, we would expect to get to break even super quickly, we would expect there to be.
Positive EBITDA for the first year, we would expect the margin to scale of normalized to what you would see in our other.
Spoke model spoke markets around the.
The world. So we would look very similar to what our Irish business or Spanish business or German business might look like so.
And that would be way north of 50 per cent contribution margins.
Perfect. Thank you very much appreciate it.
Yep.
Your next question comes from Brian.
Dutch Bank. Please go ahead.
Hi, guys. Good morning, I know, we're going long are so I'll just keep it a quick one question when I just look high level you see the massive improvement in volume on the two year in Europe, but on the two year the Americas dropped I think from 12% to 9% So just thinking.
Particularly in the Americas.
Cause for the drop on the two year and the possible rebound on the two year going forward.
Uh-huh.
Sure Hey, Brian Tom.
As we said the U S business doesn't grow as fast as our international business. So it's somewhat dilutive too that overall blended Americas.
Growth number when you look at Mach when you break it apart Mexico's grow in north of 20%.
And the U S. As we've said before it's going to be in that mid single digit kind of grower until the tech enabled peace.
Continues to grow weed.
We do see double digit mid teens growth in the ISP <unk> business not just on the top line, but also on the volume. So it's just a function of those other businesses continue to kind of Duluth, we look forward to when those businesses get smaller and.
And aren't.
Influence in some of the some of the blended numbers, but you just seen a blend of those other businesses continue.
The overall.
But internationally and whether it's Europe or or Mexico.
The volume numbers are very strong.
And I'll just add to that while the <unk> business has done incredibly well through the pandemic.
Relative to other business channels that we have.
Our ISP business in the us while we're growing outside of hospitality.
Business, we acquired years ago was predominantly hospitality so.
That segment saw some closures and that segment has rebounded and then retrenched in rebounded of retrenched in this AD service issues and.
Getting servers et cetera, So I think that's fine.
Really a headwind, but relative to volumes and maybe what the balance back would have otherwise looked at looked like.
I think that has played into it a little bit too.
Got it helpful I'll keep it there thanks guys.
Thanks.
Your next question comes from Jason Kupferberg, Some bank of America. Please go ahead.
Hey, guys. This is Kathy.
I didn't want to follow up on the.
October tests that you mentioned would cost them into their relative to September is that's about the America than the European segment and are you. Assuming these trends are holding steady income these October levels.
I hate your 2021 guidance.
So yeah I think it's Tom.
Tom can amplify, but I think we're pretty consistent in relative to where we were coming out of the quarter and we would expect that they will continue we have a holiday season.
That we're approaching and two markets in particular have probably more exposure to big box type of activity that would be a Mexico and our Polish market.
As opposed to kind of most of our others would be more staple type of activity. So there may be some improvement in December just as relative to other months just because of the holiday.
Okay. That's helpful and I just wanted to thank you.
Follow up on margin I know you guys.
Right now.
Point, the migraine and casual.
Like certain kind of be thinking about it.
75.
Of annual expansion in understanding samples that are coming back.
Which is kind of like a little bit about the salaries balanced polka dotted quarter. Thank you.
Hey, Kathy.
Similar to my comments I think what does that answer in Bob's question in terms of how do we think about 22 I was focused on on revenue growth and talking about how we think it will be a bit outsized relative to the long term historical run rate I think we'd feel the same way on margins as well so before prepandemic, we were kind of 50 to 75 annually.
<unk> I think that rotates up to 75 to 100.
We will continue to invest in the company longterm, adding resources predominantly people customer facing people, whether that's customer support or sales. So that we can continue to feed the distribution engine.
But we will be.
Very focused on operating leverage we've demonstrated.
Strong execution through and coming out of the pandemic and I think operating leverage will continue to be something that you will see us generate which will cause those margins to continue to expand obviously the the 300 basis point is a complete pandemic reset but from here, we see margins growing at a higher rate than historically.
Alright, thank God.
Thank you.
Yeah next question comes from can suggest some autonomous.
Please go ahead.
Hi, good morning, everyone thinks.
So taking the question here I just wanted to follow up on on the chilly opportunity.
I think you mentioned that was a $25 million revenue opportunity within three years and can you talk about how you expect that revenue to ramp over the coming years does it is it linear call at 816 25.
Oh over three years and I get any other detail and how you came up with that estimate and if there is upside to that number.
Sure he.
Candidates, Tom and Brendan I can kind of tag team. This so.
So no we would see it obviously accelerate as Brennan said 2021 is our startup year being Pargo Fasulo came with an established business hype thousand merchants and growing.
But the <unk> were starting from scratch and partnering with the the BCCI.
Very well to get that that movie, we would see part of the reasons why I feel good about 2022, unless this out and one of my earlier remarks, when I was answering Bob's question, but I think chili is also a significant tailwind financially for us and 22.
We see that in kind of call. It just to use round numbers $10 million ish kind of revenue number.
For for 22, and then we can see it.
Doubling from there is that business continues to.
Accelerate strong margins the margins will increase over time as we gain scale.
Cover more of those fixed costs that we put in the market, but given the hub and spoke structure that we have those fixed costs are customer facing sales generation.
Type resources that will more than pay for themselves. So it will accelerate to that 25 million dollar number, but we see significant contribution in 22 coming from from Chile brand New one.
Yes.
Think about the opportunity set.
The banks addressable audience in terms of their customer base. They have mid seventies thousand corporate customers 75 to 80000 corporate customers and the goal is to service those as many as we possibly can.
I think the CEO of the bank.
Set a target for 10000 merchants of this year I think that's likely ambitious I hope he's not listening, but we're going to give it our best shot.
But I.
I do think this gateway has been a huge addition to us in terms of capabilities and we are seeing a lot of demand that business boarded 1500 customers in the third quarter alone, which is remarkable growth and I think validates the strategy that we had and buying it. So we feel really well positioned again the competition there is relatively skinny.
We are competing against.
An incumbent that has been operating as a monopoly for.
Since the origin of the payments market, there and the only other company that sort of doing something along similar lines are sent on there, but they are running at themselves not in partnership with and acquire like an evo. So I think the positioning is good I think our partner as good as I said in an earlier question. They are super Super engaged.
And I think the answer the Tom provided in terms of what the what the what the outlook look like is spot on.
I would add to this that beyond how we think that's going to perform and again Brennan said the proxy too.
Ireland is a good one because that was like twice a startup and this.
July and bank.
Is incredibly supportive and has been a great partner just as Bowie has been.
But this also gives us.
Footings within South America, which were the first international into the Chilean market and there's real estate all around chili.
Bank is going to be supportive of us finding our way into other markets.
As well so I think it's more more than just an organic story, which is great and high growth great. But it's also I think can be in M&A story in 22 and 23.
Got it that's really help on that just a quick follow up to that four by then.
Question I think in the opening remarks I think the.
The mention of of Ah.
Ah Hi, teens revenue growth rate in 2022, and I just wanted to know was that for all of Europe or was that for just Poland.
Yeah that was specific to Poland.
Ken but.
We think there's a lot of opportunity across.
Europe's so I think as we look into 2022.
See the rest of Europe.
If not to that level very near it I mean, we also had an prepared remarks that we've seen UK and Ireland grow into 30%. So really the only unknown as Spain, and the bad economy coming back and travel returning and DCC. Those are things are out of our control, but based on the things that we can control we.
See it as mid to high teens.
Okay. That's really helpful. Thanks, a lot guys.
Thanks.
And there are no further questions at this time I will tend to call back Oh, that's the presenters for closing remarks.
Alright, well, thank you operator, and thanks for everyone, who we ran a little long today, but we continue to appreciate your interest in Evo and have a good week.
Discomforts today's conference call in now disconnect.
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