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01/11 14:24
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reveals strong financial performance with an 11.4% revenue increase and 14% adjusted EBITDA growth. Positive guidance and a focus on organic growth and margin optimization further support a positive sentiment. Although there are concerns like client attrition and currency headwinds, the robust performance and optimistic outlook for LATAM, especially Brazil, are promising. The Q&A session reinforces confidence in the company's strategy, with outperformance in key segments and a strong M&A pipeline. Given the company's market cap, a positive stock price movement of 2% to 8% is anticipated.
Revenue $228.8 million, an 11.4% increase year-over-year, with growth across all segments; currency headwind of approximately 3.3%.
Adjusted EBITDA $89.4 million, up approximately 14% year-over-year, with a margin of 39.1%, an increase of 100 basis points; growth driven by strong revenue performance and efficiency focus, partially offset by a revenue mix shift to lower margin hardware and software sales.
Adjusted EPS $0.87, up 21% year-over-year, driven by strong adjusted EBITDA growth, lower interest expense, and a lower share count.
Operating Cash Flow $37.6 million generated in the quarter.
Dividends Returned to Shareholders $3.2 million returned to shareholders through dividends.
Liquidity Approximately $460 million as of March 31.
Net Cash from Operating Activities $37.6 million.
Capital Expenditures $22.3 million in the quarter, in line with the plan for $85 million in CapEx for 2025.
Net Debt Position $704 million, with total loans and short-term debt of $969.8 million offset by $265.9 million of unrestricted cash.
Weighted Average Interest Rate Approximately 6.5%, a decrease of approximately 70 basis points year-over-year, driven by lower sulfur rates and successful repricing of Term Loan B.
Net Debt to Trailing 12-Month Adjusted EBITDA Approximately 2.04x, down from 2.5x a year ago.
Total Liquidity $459.7 million, up approximately $52 million from a year ago.
LatAm Revenue Growth: LatAm revenue grew 13% year-over-year or 22% measured in constant currency, driven by the GetNet Chile relationship and the reacceleration of the Brazil business.
Merchant Acquiring Growth: Merchant Acquiring grew 11% due to improved spread and increased sales volumes.
Payments Puerto Rico Growth: Payments Puerto Rico grew 4%, driven by strong performance from ATH Movil and higher POS transaction volumes.
Business Solutions Revenue Growth: Business Solutions revenue grew 13% due to key consulting projects and one-time hardware and software sales.
Adjusted EBITDA Margin: Adjusted EBITDA margin was 39.1%, up approximately 100 basis points from a year ago, reflecting strong revenue performance and focus on efficiency.
Operating Cash Flow: Generated approximately $37.6 million in operating cash flows.
Liquidity Position: Liquidity remains strong at approximately $460 million as of March 31.
Tariff Discussions: Identified a few areas where tariffs could impact business; monitoring customer confidence and potential indirect impacts.
Acquisition of Noncontrolling Interest: Acquired remaining noncontrolling interest in a Sinqia subsidiary for approximately $5.2 million.
Macro Economic Uncertainty: The company is operating against a backdrop of increased macro uncertainty, which could impact customer confidence and overall business performance.
Tariff Discussions: Potential tariffs could have a direct impact on the business, particularly affecting customer confidence and employment in the regions served, which may indirectly affect payment volumes.
Currency Headwinds: Currency fluctuations, particularly the devaluation of the Brazilian real, have been identified as a headwind affecting revenue growth.
Client Attrition: Expected client attrition, notably from MercadoLibre, is anticipated to impact processing services and revenue in the Payments Latin America segment.
Economic Disruption Risks: Countries served by EVERTEC, such as Brazil and Chile, rely heavily on exports, which could lead to economic disruptions affecting payment volumes.
Discount Impact: A 10% popular discount will begin to impact revenue and adjusted EBITDA in Q4 2025, potentially reducing margins.
Revenue Growth: Revenue for Q1 2025 was $228.8 million, an 11.4% increase over the prior year, with growth across all segments.
Adjusted EBITDA: Adjusted EBITDA was $89.4 million, up approximately 14% year-over-year, with a margin of 39.1%.
Capital Expenditures: Capital expenditures were $22.3 million in Q1 2025, in line with the plan for $85 million for the full year.
Acquisitions: Acquired remaining noncontrolling interest in a Sinqia subsidiary for approximately $5.2 million.
Cost Initiatives: Cost initiatives are in place to offset the impact of a 10% discount expected to affect revenue and adjusted EBITDA in Q4 2025.
2025 Revenue Outlook: Expect constant currency revenue between $903 million to $911 million, representing growth of 6.8% to 7.7% year-over-year.
Adjusted EPS Growth: Constant currency adjusted EPS is expected to grow between 4.9% and 7.6% from the $3.28 reported for 2024.
Adjusted EBITDA Margin: Expected adjusted EBITDA margin of 39.5% to 40.5% for 2025.
Tax Rate: Expected adjusted effective tax rate of 6% to 7%.
CapEx Guidance: CapEx is projected to be approximately $85 million for 2025.
Dividends Returned to Shareholders: $3.2 million returned to shareholders through dividends in Q1 2025.
Share Repurchase Program: Approximately $138 million available for future use under the company's share repurchase program through December 31, 2025.
Share Repurchases: No shares were repurchased during the first quarter.
The earnings call reflects a positive sentiment with strong revenue growth in Latin America, increased adjusted EPS, and robust liquidity. Although there was a slight decline in margins, it was attributed to a one-time event. The company has also announced a $150 million share repurchase program, which is a positive indicator for shareholders. The Q&A section highlights successful integration of acquisitions and optimism for continued growth, particularly in LatAm. Overall, despite some uncertainties, the company's strong fundamentals and strategic initiatives suggest a positive stock price movement.
The earnings call indicates strong financial performance with revenue and EBITDA growth, positive guidance, and a focus on cost initiatives. The Q&A reveals optimism in tech modernization, repricing, and M&A opportunities, with management expressing confidence in the pipeline and expansion in Mexico. Despite some avoidance of specifics, the overall sentiment is positive, supported by strong growth in ATH Móvil and raised full-year guidance. Given the company's market cap, a positive stock price reaction (2% to 8%) is anticipated over the next two weeks.
The earnings call reveals strong financial performance with an 11.4% revenue increase and 14% adjusted EBITDA growth. Positive guidance and a focus on organic growth and margin optimization further support a positive sentiment. Although there are concerns like client attrition and currency headwinds, the robust performance and optimistic outlook for LATAM, especially Brazil, are promising. The Q&A session reinforces confidence in the company's strategy, with outperformance in key segments and a strong M&A pipeline. Given the company's market cap, a positive stock price movement of 2% to 8% is anticipated.
The earnings call presents mixed signals. Positive factors include strong financial performance in 2024, robust pipeline development in LATAM, and shareholder returns. However, risks such as client attrition, regulatory issues, and supply chain challenges, along with a modest 2025 revenue growth guidance, offset these positives. The Q&A session highlighted some uncertainties, particularly regarding the performance of Sinqia and the Merchant segment. Given the market cap, the stock is likely to remain stable, resulting in a neutral sentiment prediction.
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