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01/11 14:25
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
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.
Revenue $230 million, an 8% increase over the prior year, while constant currency revenue was approximately $233 million, representing growth of 10%. The growth was driven by solid performance across all segments.
Adjusted EBITDA $93 million, up approximately 8% year-over-year, with an adjusted EBITDA margin of 40.3%. The growth was attributed to strong revenue performance.
Adjusted EPS $0.89, up 7% year-over-year, driven by strong adjusted EBITDA growth and lower interest expense, partially offset by higher tax expense and operating depreciation and amortization.
Operating Cash Flow Approximately $86 million during the first half of the year. The company returned cash to shareholders through $6.4 million in dividends and $3.7 million of share repurchases.
Merchant Acquiring Revenue $47.3 million, a 4% increase year-over-year, driven by an improvement in spread and sales volume growth. Lower gas prices negatively impacted sales volume growth, but this was offset by an increase in government-related payments related to tax returns.
Payment Services Puerto Rico Revenue $56.4 million, a 4% increase year-over-year, driven by ATH Móvil business and 5% POS transaction growth. This was partially offset by a decrease in services provided to the Latin America segment due to customer attrition.
ATH Móvil Revenue Grew 17% year-over-year, driven by strong performance in ATH business and POS transaction growth.
Latin America Payments & Solutions Revenue $86.1 million, up 15% year-over-year or 20% on a constant currency basis. Growth was driven by organic growth, strong performance in the GetNet Chile relationship, reacceleration in Brazil, and contributions from Grandata and Nubity acquisitions.
Business Solutions Revenue $64.5 million, a 4% increase year-over-year, driven by projects completed in the prior year and an increase in IT consulting services. Adjusted EBITDA was $26 million, down 13% year-over-year, with a margin decrease of 750 basis points due to the prior year's highly accretive nonrecurring project.
Corporate and Other Adjusted EBITDA Negative $9.8 million, or 4.3% of total revenue, reflecting benefits from expense management initiatives.
Net Debt Position $673.6 million, with a weighted average interest rate of approximately 6.55%, a decrease of 60 basis points from the second quarter of 2024. Net debt to trailing 12-month adjusted EBITDA was approximately 1.95x, down from 2.28x a year ago.
ATH Móvil: Revenue grew 17% year-over-year, driven by strong performance in ATH business and POS transaction growth.
Grandata and Nubity acquisitions: Contributed to 15% year-over-year revenue growth in Latin America Payments & Solutions, with 20% growth on a constant currency basis.
Puerto Rico market: Merchant Acquiring revenue grew 4% year-over-year due to pricing initiatives and sales volume growth. Payment Services Puerto Rico also grew 4%, supported by ATH Móvil and POS transaction growth.
Latin America market: Revenue increased 15% year-over-year (20% on constant currency), driven by organic growth and contributions from acquisitions. Pipeline remains active with potential for future wins.
Revenue growth: Total revenue for Q2 2025 was $230 million, an 8% increase year-over-year, with constant currency revenue at $233 million (10% growth).
Adjusted EBITDA: Increased to $93 million, up 8% year-over-year, with a margin of 40.3%.
Cash flow and liquidity: Generated $86 million in operating cash flow in H1 2025. Liquidity remains strong at $485 million as of June 30.
Share repurchase program: Board approved a refresh of the share repurchase program, authorizing up to $150 million in repurchases through December 31, 2026.
Cost initiatives: Implemented to offset the impact of a 10% discount to Popular MSA services starting Q4 2025, with gradual margin improvement expected.
Potential Tariffs in Latin America: The company remains vigilant about potential tariffs that might be imposed in the countries where it operates, which could impact operations.
Attrition in Latin America Segment: The Latin America segment experienced customer attrition, particularly related to the MELI relationship, which negatively impacted transactions processed.
Foreign Currency Headwinds: The company faced headwinds from the Brazilian real, which affected constant currency revenue growth.
Discount to Popular MSA Services: A 10% discount to Popular MSA services in Q4 2025 is expected to impact revenue and adjusted EBITDA by approximately $4 million per quarter.
Higher Processing Costs: Merchant Acquiring segment faced higher processing costs due to increased overall transactions, despite revenue growth.
Decreasing Margins in Business Solutions: Margins in the Business Solutions segment decreased due to the absence of highly accretive nonrecurring projects recognized in the prior year.
Tax Expense Increase: Higher tax expenses were noted, driven by growth in higher tax jurisdictions and reduced interest expense, which impacts tax efficiencies.
Revenue Expectations: Revenues are expected to be between $901 million and $909 million for 2025, representing growth of 6.6% to 7.6%. On a constant currency basis, growth is expected to be 7.8% to 8.7% year-over-year.
Adjusted EPS: Adjusted EPS is expected to grow between 4.8% and 7% from the $3.28 reported for 2024, higher than the previous assumption of 2.4% to 5.2% growth.
Adjusted EBITDA Margin: The adjusted EBITDA margin is expected to remain between 39.5% and 40.5% for 2025.
Segment Revenue Growth: Merchant Acquiring is expected to see mid-single-digit growth. Payments Puerto Rico and Caribbean are expected to see low to mid-single-digit growth. Payments Latin America is expected to see low double-digit growth, with constant currency growth in the low to mid-teens. Business Solutions is expected to see low single-digit revenue growth.
Foreign Currency Impact: Improvement in foreign currency, particularly the Brazilian real, is incorporated into the outlook for the rest of the year.
Capital Expenditures: CapEx is expected to be approximately $85 million for 2025.
Tax Rate: The adjusted effective tax rate is expected to be between 6% and 7%.
Share Repurchase Program: The Board of Directors has authorized a share repurchase program of up to $150 million through December 31, 2026.
Dividends Paid: $6.4 million in dividends were returned to shareholders during the first half of the year.
Share Repurchase Program: The Board of Directors approved a refresh of the share repurchase program, authorizing the company to repurchase up to an aggregate of $150 million of shares of its common stock through December 31, 2026. Approximately $3.7 million worth of shares were repurchased during the 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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