EVERTEC, Inc. (EVTC) Q3 2025 Earnings Call Transcript

EVERTEC (EVTC) reported a strong Q3 2025, with revenue up 8% to $228.6 million, adjusted EBITDA increasing 6% to $92.6 million, and adjusted EPS rising 7% to $0.92, driven by robust organic growth across all segments, particularly in Latin America. The company successfully closed the Tecnobank acquisition in Brazil, expanded its LatAm footprint with new deals in Chile and Peru, and navigated a contained cybersecurity incident in Brazil's PIX system with minimal commercial impact. EVERTEC raised its full-year 2025 revenue and adjusted EPS outlook, while also outlining 2026 headwinds including a 10% discount on its Banco Popular MSA services, partially offset by continued LatAm momentum and cost efficiencies.

Analysis

EVERTEC (EVTC) delivered a strong third quarter in 2025, reporting an 8% year-over-year revenue increase to $228.6 million, with adjusted EBITDA growing 6% to $92.6 million and adjusted EPS up 7% to $0.92. This performance was largely driven by robust organic growth across all segments, particularly in Latin America, which saw a 19% revenue increase, and contributions from recent acquisitions. The company has consequently raised its full-year 2025 revenue outlook to $921-$927 million, representing 8.9%-9.6% growth, and adjusted EPS growth to 8.5%-10.4%.

Strategic developments include the successful closing of the Tecnobank acquisition in Brazil, strengthening its fintech capabilities, and significant new client wins with Banco de Chile and Financiera Oh in Peru, validating its LatAm expansion strategy. The company also managed a cybersecurity incident in Sinqia's PIX environment in August, which was contained, isolated to Brazil, and resulted in minimal commercial impact, with most funds recovered.

Looking to 2026, EVERTEC anticipates headwinds, primarily a 10% discount on its Banco Popular MSA services, estimated at a $14 million annual impact, and the normalization of transaction volumes from the Bad Bunny residency. However, these are expected to be partially offset by continued strong organic momentum in Latin America, strategic M&A contributions, and targeted cost efficiency initiatives. The company's net debt to trailing 12-month adjusted EBITDA stands at a healthy 1.8x, with $518.6 million in liquidity.

Key Decisions for Investors

• Investors should closely monitor the impact of the 10% Banco Popular discount on 2026 financials and the effectiveness of EVERTEC's cost efficiency measures in mitigating this headwind.
• Evaluate the continued growth trajectory and successful integration of acquisitions in the Latin American segment, particularly the ramp-up of new client wins in Chile and Peru, as a key driver for long-term value.
• Assess EVERTEC's capital allocation strategy, considering the balance between further strategic M&A opportunities and potential share repurchases, given the company's strong balance sheet and remaining $150 million authorization.