Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Nov. 01, 2018 | |
Entity Registrant Name | EVO Payments, Inc. | |
Entity Central Index Key | 1,704,596 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Class A Common Stock | ||
Entity Common Stock, Shares Outstanding | 25,378,116 | |
Class B Common Stock | ||
Entity Common Stock, Shares Outstanding | 35,913,538 | |
Class C Common Stock | ||
Entity Common Stock, Shares Outstanding | 2,560,955 | |
Class D Common Stock | ||
Entity Common Stock, Shares Outstanding | 17,282,930 |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 235,484 | $ 205,142 |
Accounts receivable, net | 10,277 | 15,881 |
Other receivables | 53,083 | 55,345 |
Due from related parties | 2,331 | 2,625 |
Inventory | 7,571 | 11,210 |
Settlement processing assets | 504,029 | 439,269 |
Other current assets | 13,126 | 20,941 |
Total current assets | 825,901 | 750,413 |
Equipment and improvements, net | 101,931 | 96,587 |
Goodwill | 342,095 | 311,678 |
Intangible assets, net | 331,122 | 313,483 |
Investment in unconsolidated investees | 1,372 | 1,379 |
Due from related parties | 923 | 109 |
Deferred tax asset | 63,786 | 9,057 |
Other assets | 24,939 | 25,592 |
Total assets | 1,692,069 | 1,508,298 |
Current liabilities: | ||
Settlement lines of credit | 35,131 | 28,563 |
Current portion of long-term debt | 7,416 | 75,008 |
Accounts payable | 46,196 | 61,149 |
Accrued expenses | 130,610 | 94,235 |
Settlement processing obligations | 559,302 | 484,518 |
Due to related parties | 4,597 | 7,847 |
Total current liabilities | 783,252 | 751,320 |
Long-term debt, net of current portion | 674,544 | 760,946 |
Due to related parties | 385 | 675 |
Deferred tax liability | 11,494 | 11,011 |
Tax receivable agreement obligations | 42,393 | |
ISO reserves | 2,652 | 2,611 |
Total liabilities | 1,514,720 | 1,526,563 |
Commitments and contingencies | ||
Redeemable non-controlling interests | 969,276 | 148,266 |
Shareholders'/members' equity (deficit): | ||
Additional paid-in capital | 175,843 | |
Accumulated deficit attributable to Class A common stock | (131,058) | |
Accumulated deficit attributable to members of EVO Investco, LLC | (237,330) | |
Accumulated other comprehensive income (loss) | 319 | (67,679) |
Total shareholders'/members' equity (deficit) | 45,112 | (169,843) |
Nonredeemable non-controlling interests | (837,039) | 3,312 |
Total deficit | (791,927) | (166,531) |
Total liabilities and deficit | 1,692,069 | 1,508,298 |
Class A Common Stock | ||
Shareholders'/members' equity (deficit): | ||
Common stock | 3 | |
Class B Common Stock | ||
Shareholders'/members' equity (deficit): | ||
Common stock | 4 | |
Class C Common Stock | ||
Shareholders'/members' equity (deficit): | ||
Common stock | ||
Class D Common Stock | ||
Shareholders'/members' equity (deficit): | ||
Common stock | 1 | |
Class A Units | ||
Shareholders'/members' equity (deficit): | ||
Capital units | 54,453 | |
Class B Units | ||
Shareholders'/members' equity (deficit): | ||
Capital units | ||
Class C Units | ||
Shareholders'/members' equity (deficit): | ||
Capital units | 9,463 | |
Class D Units | ||
Shareholders'/members' equity (deficit): | ||
Capital units | ||
Class E Units | ||
Shareholders'/members' equity (deficit): | ||
Capital units | $ 71,250 |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2018 | Dec. 31, 2017 |
Class A Units | ||
Shareholders'/members' equity (deficit): | ||
Capital units (in units) | 0 | 6,374,000 |
Class B Units | ||
Shareholders'/members' equity (deficit): | ||
Capital units (in units) | 0 | 3,506,000 |
Class C Units | ||
Shareholders'/members' equity (deficit): | ||
Capital units (in units) | 0 | 375,000 |
Class D Units | ||
Shareholders'/members' equity (deficit): | ||
Capital units (in units) | 0 | 1,104,000 |
Class E Units | ||
Shareholders'/members' equity (deficit): | ||
Capital units (in units) | 0 | 1,012,000 |
Class A Common Stock | ||
Shareholders'/members' equity (deficit): | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock shares authorized (in shares) | 200,000,000 | 0 |
Common stock shares issued (in shares) | 25,370,797 | 0 |
Common stock shares outstanding (in shares) | 25,370,797 | 0 |
Class B Common Stock | ||
Shareholders'/members' equity (deficit): | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock shares authorized (in shares) | 40,000,000 | 0 |
Common stock shares issued (in shares) | 35,913,538 | 0 |
Common stock shares outstanding (in shares) | 35,913,538 | 0 |
Class C Common Stock | ||
Shareholders'/members' equity (deficit): | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock shares authorized (in shares) | 4,000,000 | 0 |
Common stock shares issued (in shares) | 2,560,955 | 0 |
Common stock shares outstanding (in shares) | 2,560,955 | 0 |
Class D Common Stock | ||
Shareholders'/members' equity (deficit): | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock shares authorized (in shares) | 32,000,000 | 0 |
Common stock shares issued (in shares) | 17,282,930 | 0 |
Common stock shares outstanding (in shares) | 17,282,930 | 0 |
Unaudited Condensed Consolida_3
Unaudited Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Unaudited Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income | ||||
Revenue | $ 144,758 | $ 132,646 | $ 413,931 | $ 366,165 |
Operating expenses: | ||||
Cost of services and products, exclusive of depreciation and amortization shown separately below | 46,949 | 43,487 | 141,826 | 119,310 |
Selling, general and administrative | 67,802 | 58,333 | 242,982 | 162,870 |
Depreciation and amortization | 20,488 | 19,806 | 61,308 | 55,479 |
Total operating expenses | 135,239 | 121,626 | 446,116 | 337,659 |
Income (loss) from operations | 9,519 | 11,020 | (32,185) | 28,506 |
Other (expense) income: | ||||
Interest income | 507 | 313 | 1,622 | 951 |
Interest expense | (10,583) | (15,939) | (47,453) | (46,516) |
(Loss) income from investment in unconsolidated investees | (36) | (22) | 725 | 736 |
Gain on acquisition of unconsolidated investee | 8,659 | 8,659 | ||
Other income (expense), net | 211 | (89) | (2,963) | (263) |
Total other expense | (1,242) | (15,737) | (39,410) | (45,092) |
Income (loss) before income taxes | 8,277 | (4,717) | (71,595) | (16,586) |
Income tax expense | (32,155) | (5,377) | (7,974) | (14,734) |
Net Loss | (23,878) | (10,094) | (79,569) | (31,320) |
Less: Net income attributable to non-controlling interests in consolidated entities | (2,433) | (2,165) | (4,434) | (5,019) |
Net loss attributable to EVO Investco, LLC | (12,259) | (36,339) | ||
Less: Net (loss) income attributable to non-controlling interests of EVO Investco, LLC | 1,078 | (73,328) | ||
Net income attributable to EVO Payments, Inc. | $ (27,389) | $ (10,675) | ||
Earnings per share | ||||
Basic (in dollars per share) | $ (1.51) | $ (0.60) | ||
Diluted (in dollars per share) | $ (1.51) | $ (0.60) | ||
Weighted average Class A common stock outstanding | ||||
Basic (in shares) | 18,163,344 | 17,901,484 | ||
Diluted (in shares) | 18,163,344 | 17,901,484 | ||
Comprehensive loss: | ||||
Net loss | $ (23,878) | (10,094) | $ (79,569) | (31,320) |
Unrealized gain on defined benefit pension plan | 18 | 538 | ||
Unrealized gain on foreign currency translation adjustment | 9,494 | 5,203 | 334 | 59,002 |
Other comprehensive income | 9,494 | 5,221 | 334 | 59,540 |
Comprehensive (loss) income | (14,384) | (4,873) | (79,235) | 28,220 |
Less: Comprehensive loss attributable to consolidated entities | (5,272) | (2,165) | (3,120) | (5,019) |
Comprehensive(loss) income attributable to EVO Investco, LLC | $ (7,038) | $ 23,201 | ||
Less: other comprehensive (loss) income attributable to non-controlling interest of EVO Investco, LLC | (1,078) | 76,704 | ||
Comprehensive loss attributable to EVO Payments, Inc. | $ (20,734) | $ (5,651) |
Unaudited Condensed Consolida_4
Unaudited Condensed Consolidated Statements of Changes in Equity - 9 months ended Sep. 30, 2018 - USD ($) shares in Thousands, $ in Thousands | EVO Payments, Inc. (deficit)/equity | Common StockClass A Common Stock | Common StockClass B Common Stock | Common StockClass C Common Stock | Common StockClass D Common Stock | Member UnitsClass A Units | Member UnitsClass B Units | Member UnitsClass C Units | Member UnitsClass D Units | Member UnitsClass E Units | Additional paid-in capital | Accumulated deficit attributable to Class A common stock | Accumulated deficit attributable to members of EVO Investco, LLC | Accumulated other comprehensive loss | Nonredeemable non-controlling interests | Total |
Beginning balance at Dec. 31, 2017 | $ (169,843) | $ 54,453 | $ 9,463 | $ 71,250 | $ (237,330) | $ (67,679) | $ 3,312 | $ (166,531) | ||||||||
Beginning balance (in units) at Dec. 31, 2017 | 6,374 | 3,506 | 375 | 1,107 | 1,012 | |||||||||||
Net income prior to Reorganization Transaction | (24,412) | (24,412) | (24,412) | |||||||||||||
Cumulative translation adjustment prior to Reorganization Transactions | (6,337) | (6,337) | (6,337) | |||||||||||||
Distributions prior to Reorganization Transactions | (1,334) | (1,334) | ||||||||||||||
Acquisition of additional shares in a consolidated subsidiary | (20,924) | (20,924) | (1,141) | (22,065) | ||||||||||||
Legacy deficit / accumulated comprehensive loss allocation (Class C&D) | 166,793 | 132,181 | 34,612 | (166,793) | ||||||||||||
Legacy deficit / accumulated comprehensive loss allocation (Class B) | 189,889 | $ 150,485 | 39,404 | 189,889 | ||||||||||||
Equity issued in connection with acquisition prior to Reorganization Transactions | $ 4 | $ 2 | $ (54,453) | $ (9,463) | $ (71,250) | $ 135,160 | ||||||||||
Equity issued in connection with acquisition prior to Reorganization Transactions (in units and shares) | 1,319 | 35,914 | 2,561 | 24,305 | (6,374) | (3,506) | (375) | (1,107) | (1,012) | |||||||
Share-based compensation prior to Reorganization Transactions, net of share settlement | 51,339 | 51,339 | 51,339 | |||||||||||||
Share-based compensation prior to Reorganization Transactions, net of share settlement (in shares) | 494 | |||||||||||||||
Class B redeemable non-controlling interests fair value adjustment in connection to Reorganization Transactions | (735,775) | (735,775) | ||||||||||||||
Effect of Reorganization Transactions | 186,505 | $ 4 | $ 2 | 186,499 | (901,731) | (715,226) | ||||||||||
Effect of Reorganization Transactions (in shares) | 1,813 | 35,914 | 2,561 | 24,305 | ||||||||||||
Sale of Class A common stock in initial public offering, net of underwriting fees | 219,169 | $ 2 | 219,167 | 219,169 | ||||||||||||
Sale of Class A common stock in initial public offering, net of underwriting fees (in shares) | 15,434 | |||||||||||||||
Contingent consideration settled in Class A common stock | 771 | 771 | 771 | |||||||||||||
Contingent consideration settled in Class A common stock (in shares) | 48 | |||||||||||||||
Deferred taxes in connection with the Reorganization Transactions | 4,590 | 4,590 | 4,590 | |||||||||||||
Tax receivable agreement obligations in connection with the Reorganization Transactions | 389 | 389 | 389 | |||||||||||||
Net income subsequent to the Reorganization Transactions | (10,675) | $ (10,675) | (20,714) | (31,389) | ||||||||||||
Cumulative translation adjustment subsequent to the Reorganization Transactions | 293 | 293 | 852 | 1,145 | ||||||||||||
Distributions subsequent to the Reorganization Transactions | (29) | (29) | ||||||||||||||
Sale of Class A common stock in Secondary Offering, net of underwriting fees | 190,161 | $ 1 | 190,161 | 190,161 | ||||||||||||
Sale of Class A common stock in Secondary Offering, net of underwriting fees (in shares) | 8,054 | |||||||||||||||
Sale of MDP Class D Shares | (435,850) | $ (1) | (435,850) | 269,924 | (165,926) | |||||||||||
Sale of MDP Class D Shares (in shares) | (7,000) | |||||||||||||||
Legacy redeemable non-controlling interests fair value adjustment | (3,824) | (3,824) | (5,918) | (9,742) | ||||||||||||
Sale of Employee Ownership | (857) | (857) | 857 | |||||||||||||
Sale of Employee Ownership (in shares) | 22 | (22) | ||||||||||||||
Net deferred tax asset realized in Secondary Offering | 2,071 | 2,045 | 26 | 2,071 | ||||||||||||
Tax receivable agreement in connection with the Secondary Offering | 7,170 | 7,170 | 7,170 | |||||||||||||
Share-based compensation | 1,758 | 1,758 | 1,758 | |||||||||||||
Additional redeemable non-controlling interest subsequent to the Reorganization Transactions | (116,559) | (116,559) | (180,280) | (296,839) | ||||||||||||
Ending balance at Sep. 30, 2018 | $ 45,112 | $ 3 | $ 4 | $ 1 | $ 175,843 | $ (131,058) | $ 319 | $ (837,039) | $ (791,927) | |||||||
Ending balance (in shares) at Sep. 30, 2018 | 25,371 | 35,914 | 2,561 | 17,283 |
Unaudited Condensed Consolida_5
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash flows from operating activities: | ||
Net loss | $ (79,569) | $ (31,320) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 61,308 | 55,479 |
Loss on sale of investments | 1,308 | |
Amortization of deferred financing costs | 7,856 | 2,394 |
Loss on extinguishment of debt | 2,055 | |
Share-based compensation expense | 53,893 | |
Loss on disposal of equipment and improvements | 955 | |
Undistributed earnings from unconsolidated investees | 61 | (67) |
Gain on acquisition of unconsolidated investee | (8,659) | |
Accrued interest expense | (106) | 915 |
Accrued interest income | (78) | (17) |
Deferred rent | (359) | (36) |
Deferred taxes | 504 | 8,121 |
Loss on payment of contingent consideration | 105 | |
Reserve on uncollectible notes receivable | 28 | (19) |
Changes in operating assets and liabilities, net of effect of acquisitions: | ||
Accounts receivable, net | 5,822 | (8,155) |
Other receivables | 3,993 | 1,044 |
Inventory | 3,555 | (924) |
Other current assets | (5,165) | (5,293) |
Other assets | 53 | 4,847 |
Related parties | (3,001) | (14,499) |
Accounts payable | (16,744) | (261) |
Accrued expenses | 28,900 | 11,970 |
Settlement processing funds, net | 10,899 | (22,304) |
ISO reserves | 42 | (260) |
Net cash provided by operating activities | 66,348 | 2,923 |
Cash flows from investing activities: | ||
Restricted cash | 125,000 | |
Acquisition of businesses, net of cash acquired | (48,547) | (124,964) |
Purchase of equipment and improvements | (38,963) | (24,389) |
Acquisition of intangible assets | (19,893) | (14,472) |
Net proceeds from sale of investments | 205 | |
Issuance of notes receivable | (20) | (7) |
Collections of notes receivable | 91 | 968 |
Net cash used in investing activities | (107,332) | (37,659) |
Cash flows from financing activities: | ||
Proceeds from long-term debt | 655,732 | 627,570 |
Repayments of long-term debt | (743,342) | (645,478) |
Deferred financing costs paid | (3,899) | (19) |
Contingent consideration paid | (1,621) | |
Deferred cash consideration paid | (65,000) | |
Acquisition of additional non-controlling interest | (16,916) | |
IPO proceeds, net of underwriter fees | 231,500 | |
Secondary offering proceeds, net of underwriter fees | 24,967 | |
Consideration paid for additional shares in a consolidated subsidiary | (3,962) | |
Contributions by members | 71,250 | |
Distribution to members | (1,708) | |
Distribution to non-controlling interests holders | (6,136) | (2,291) |
Net cash provided by financing activities | 75,285 | 45,362 |
Effect of exchange rate changes on cash and cash equivalents | (3,959) | 13,460 |
Net increase in cash and cash equivalents | 30,342 | 24,086 |
Cash and cash equivalents, beginning of year | 205,142 | 203,324 |
Cash and cash equivalents, end of period | $ 235,484 | $ 227,410 |
Description of Business and Sum
Description of Business and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2018 | |
Description of Business and Summary of Significant Accounting Policies | |
Description of Business and Summary of Significant Accounting Policies | (1) (a) EVO Payments, Inc. (“EVO, Inc.” or the “Company”) is a Delaware corporation whose “primary asset” is its ownership of approximately 31.3% of the membership interests of EVO Investco, LLC (“EVO, LLC”) as of September 30, 2018. EVO, Inc. was incorporated on April 20, 2017 for the purpose of completing the Reorganization Transactions, in order to consummate the IPO and to carry on the business of EVO, LLC. On September 20, 2018, EVO, Inc. completed a secondary offering (the “Secondary Offering”), which consisted of the issuance of 8,075,558 shares of Class A common stock. EVO, Inc. is the sole managing member of EVO, LLC and operates and controls all of the businesses and affairs conducted by the Group. The Company is a leading payment technology and services provider, offering an array of innovative, reliable, and secure payment solutions to merchants across North America and Europe. The Company supports all major card types in the markets it serves. The Company provides card-based payment processing services to small and middle market merchants, multinational corporations, government agencies, and other business and nonprofit enterprises located throughout North America and Europe. These services enable merchants to accept credit and debit cards and other electronic payment methods as payment for their products and services by providing terminal devices, card authorization, data capture, funds settlement, risk management, fraud detection, and chargeback services. As of September 30, 2018, the Company serviced over 550,000 merchants, had the ability to process across 50 markets and operated two reportable segments: North America and Europe. Since 2012, the Company has acquired and established various interests in entities that expanded the Company’s presence in North America and Europe. Most of these acquisitions were financed by an increase in the Company’s bank credit facilities. (b) The accompanying unaudited condensed consolidated balance sheets as of September 30, 2018 , the unaudited condensed consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2018 and 2017, the unaudited condensed consolidated statement of changes in equity for the nine months ended September 30, 2018, and the unaudited condensed consolidated statements of cash flows for the nine months ended September 30, 2018 and 2017 reflect all adjustments that are of a normal, recurring nature and that are considered necessary for a fair presentation of the results for the periods shown in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the applicable rules and regulations of the Securities Exchange Commission (“SEC”) for interim financial reporting periods. Accordingly, certain information and footnote disclosures have been condensed or omitted in accordance with SEC rules that would ordinarily be required under U.S. GAAP for complete financial statements. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s final prospectus filed with the SEC on May 24, 2018 for the offering of Class A common stock (the “Class A common stock”). See Note 15, “Shareholders’ Equity,” to the unaudited condensed consolidated financial statements for information regarding the Reorganization Transactions and the IPO. Effective September 30, 2018, the Company has separately presented settlement lines of credit amounts on the unaudited condensed consolidated balance sheet. These settlement lines of credit were previously presented as a component of the current portion of long-term debt. Prior year amounts have been reclassified to conform to the current period’s presentation. The preparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported assets and liabilities, the disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements, and the reported amounts of revenue and expenses during the period. Accordingly, actual results could differ from those estimates. Estimates are used for accounting purposes including, but not limited to, calculating redeemable non-controlling interests, calculating income taxes, and calculating the valuation of long-lived assets. (c) The accompanying unaudited condensed consolidated financial statements include the accounts of the Company. As sole managing member of EVO, LLC, the Company exerts control over the Group. In accordance with Accounting Standards Codification (“ASC”) 810, Consolidation , EVO, Inc. consolidates the Group’s unaudited condensed consolidated financial statements and records the interests in EVO, LLC that it does not own as non-controlling interests. All intercompany accounts and transactions have been eliminated in consolidation. The Company accounts for investments over which it has significant influence but not a controlling financial interest using the equity method of accounting. (d) Cash and cash equivalents include all cash balances and highly liquid securities with original maturities of three months or less when acquired. Cash balances often exceed federally insured limits; however, concentration of credit risk is limited due to the payment of funds on the day following receipt in satisfaction of the settlement process. Included in cash and cash equivalents are merchant reserve cash balances, which represent funds collected from the Company’s merchants that serve as collateral to minimize contingent liabilities associated with any losses that may occur under the respective merchant agreements (“Merchant Reserves”). While this cash is not restricted in its use, the Company believes that maintaining the Merchant Reserves to collateralize merchant losses strengthens its fiduciary standings with its card network sponsors (“Member Banks”) and is in accordance with the guidelines set by the card networks. As of September 30, 2018, and December 31, 2017, Merchant Reserves were $105.5 million and $111.3 million, respectively. (e) Basic earnings per Class A common stock is computed by dividing the net income attributable to EVO, Inc. by the weighted average number of Class A common stock outstanding from May 23, 2018 to September 30, 2018. Diluted earnings per Class A common stock is calculated by dividing the net income attributable to EVO, Inc. by the diluted weighted average Class A common stock outstanding during the period, which includes stock options, restricted stock units (“RSUs”), restricted stock awards (“RSAs”), and common membership interest of EVO, LLC (“LLC Interests”) corresponding to each Class C common share and Class D common share that are convertible into shares of Class A common stock for the period after the closing of the IPO, excluding anti-dilutive securities. The dilutive effect of outstanding share-based compensation awards, if any, is reflected in diluted earnings per Class A common stock by application of the treasury stock method or if-converted method, as applicable. Refer to Note 2, “Earnings Per Share,” for further information. (f) In certain markets, the Company is a member of various card networks, allowing it to process and fund transactions without third party sponsorship. In other markets, the Company has financial institution sponsors Member Banks for whom the Company facilitates payment transactions. These arrangements allow the Company to route transactions under the Member Banks’ control and identification numbers to clear card transactions through card networks. A summary of these amounts are as follows: September 30, December 31, 2018 2017 (In thousands) Settlement processing assets: Receivable from card networks $ 394,583 $ 342,803 Receivable from merchants 109,446 96,466 Totals $ 504,029 $ 439,269 Settlement processing obligations: Settlement liabilities $ (453,799) $ (372,642) Merchant reserves (105,503) (111,876) Totals $ (559,302) $ (484,518) (g) The Company recognizes revenue when (1) it is realized or realizable and earned, (2) there is persuasive evidence of an arrangement, (3) delivery and performance has occurred, (4) there is a fixed or determinable sales price, and (5) collection is reasonably assured. The Company primarily earns revenue from payment processing services. Payment processing service revenue is based on a percentage of transaction value and on specified amounts per transaction or service, and is recognized as such services are performed. The Company also earns revenue from the sale and rental of electronic point-of-sale (“POS”) equipment. Revenue from the sale of these products is recognized when goods are shipped and title passes to the customer. Revenue from the rental of electronic POS equipment is recognized monthly as earned. These revenues are presented in “Processing and other revenue” in the below table and totaled $10.8 million and $9.9 million for the three months ended September 30, 2018 and 2017 , respectively. These revenues totaled $32.1 million and $29.4 million for the nine months ended September 30, 2018 and 2017, respectively. Such rental arrangements are considered multiple element arrangements. The Company follows guidance in ASC 605-25, Revenue Recognition – Multiple-Element Arrangements . However, because the non-processing elements are primarily accounted for as rentals with a similar delivery pattern, the elements have the same revenue recognition timing. Commissions, payable to referral and reseller partners, are recognized as incurred. A summary of revenue is as follows: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 (In thousands) (In thousands) Processing and other revenue $ 488,564 $ 455,851 $ 1,409,569 $ 1,283,223 Interchange and card network fees (282,823) (264,095) (820,328) (746,778) Subtotal 205,741 191,756 589,241 536,445 Commissions (43,345) (40,273) (123,985) (119,083) Card network processing costs and other (17,638) (18,837) (51,325) (51,197) Revenue $ 144,758 $ 132,646 $ 413,931 $ 366,165 (h) The Company accounts for share-based compensation transactions with employees in accordance with ASC 718, Compensation: Stock Compensation . ASC 718 requires a share-based compensation transaction with employees to be measured based on the fair value of the awards issued. The Company granted equity awards prior to the IPO. These awards contained a performance condition contingent on a liquidity event, as well as other metrics. These awards were modified on the IPO date by the compensation committee of the board of directors and the modified awards were fair valued on that date based on the IPO price per share of Class A common stock. The majority of these awards were fully time-vested; the Company recorded compensation expense to fully recognize the life to date value of these awards. With respect to equity awards issued as compensation in connection with the Reorganization Transactions and the IPO pursuant to the 2018 Omnibus Equity Incentive Plan, the fair value of the stock option awards are determined through the application of the Black-Scholes model. The fair value of the RSUs and RSAs was determined based on the IPO per share price or the market price at the time of grant. The fair value of awards granted to employees is expensed based on the vesting conditions of the awards. The Company has elected to recognize forfeitures at the time they occur. Refer to Note 16, “Stock Compensation Plans and Share-Based Compensation Awards,” for further information on the share-based compensation awards. (i) New accounting pronouncements are issued by the FASB or other standards setting bodies that are adopted by the Company are adopted as of the specified effective date. Unless otherwise discussed, management believes that the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s unaudited condensed consolidated financial statements upon adoption. As the Company is considered an emerging growth company under the JOBS Act adoption of new accounting standards will be consistent with private company effective dates. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement . This update provides clarification and modifies the disclosure requirements on fair value measurement in Topic 820, Fair Value Measurement . The effective date of this update is for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. The Company is evaluating the impact of this ASU on the Company’s unaudited condensed consolidated financial statements. In January 2017, the FASB issued Accounting Standards Update (“ASU”) 2017-04, Intangibles – Goodwill and Other . This update simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. The amendments in this update are effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2021. The Company has early adopted ASU 2017-04 on a prospective basis, effective January 1, 2018. The adoption of this standard did not have a material impact on the Company’s unaudited condensed consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows: Classification of Cash Receipts and Cash Payments . This update addresses eight specific cash flow issues with the objective of reducing the existing diversity in cash flow presentation practices. The amendment is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. The Company has evaluated the impact of this ASU and concluded there is no resulting impact to the presentation on the Company’s unaudited condensed consolidated statement of cash flows. In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting . This update simplifies several aspects of the accounting for share-based payments, including the accounting for excess tax benefits and deficiencies, forfeitures, and statutory tax withholding requirements, as well as classification on the statement of cash flows related to excess tax benefits and employee taxes paid when an employer withholds shares for tax-withholding purposes. The ASU is effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods beginning after December 15, 2018. Early adoption is permitted. An entity that elects early adoption must adopt all of the amendments in the same period. The Company has adopted ASU 2016-09 on a prospective basis effective July 1, 2018. The adoption of this standard did not have an impact on the Company’s unaudited condensed consolidated financial statements. In March, April and May 2016, the FASB issued ASU 2016-08, 2016-10 and 2016-12 , Revenue from Contracts with Customers . These updates clarify certain definitions and topics with respect to ASU 2014-09. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers . This ASU supersedes the revenue recognition requirements in ASC 605, Revenue Recognition . The new standard provides a five-step analysis of transactions to determine when and how revenue is recognized, based upon the core principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new standard also requires additional disclosures regarding the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The new standard, as amended, is effective for the Company for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. Companies are permitted to either apply the requirements retrospectively to all prior periods presented, or apply the requirements in the year of adoption, through a cumulative adjustment. As of the date of this filing, the Company has completed its preliminary assessment of the impacts of the standard and has determined that the amount and timing of revenue recognition for its primary contract category, payment processing services, will remain consistent with the amount and timing of revenue recognition under existing GAAP. Costs to obtain contracts with our customers, which includes certain commissions paid to employees and fulfillment costs, will be capitalized and amortized over the period of benefit under the contract term under the new standard. The Company plans to adopt ASU 2014-09, as well as other clarifications and technical guidance issued by the FASB related to this new revenue standard, on January 1, 2019. The Company expects to apply the modified retrospective transition method, which would result in an adjustment to retained earnings for the cumulative effect, if any, of applying the standard to contracts in effect as of the adoption date. Under this method, the Company will not restate the prior consolidated financial statements presented. Therefore, the new standard will require additional disclosures of the amount by which each financial statement line item has been affected in the current reporting period during 2019, as compared to the guidance that was in effect before adoption with an explanation of the reasons for significant changes, if any. The Company continues to evaluate the disclosure requirements under the new standard in order to determine how disclosures about net revenue and related acquisition costs will be impacted. In July 2018, the FASB issued ASU 2018-10 and 2018-11, Leases . These updates clarify certain definitions and topics with respect to ASU 2016-02. In February 2016, the FASB issued ASU 2016-02, Leases . This standard aims to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The new standard is effective for the Company for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early application of this ASU is permitted for all entities. The Company is evaluating the impact of this ASU on the Company’s unaudited condensed consolidated financial statements. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share | |
Earnings Per Share | (2) As described in Note 15, “Shareholders’ Equity,” on May 22, 2018, the EVO, LLC Agreement was amended and restated, to, among other things, reclassify all of the then existing membership interests of EVO, LLC into a new single class of common membership interests. Additionally, the Company entered into a series of transactions that resulted in the issuance of Class A common stock, Class B common stock, Class C common stock and Class D common stock to the holders of LLC Interests and commenced the IPO resulting in the public issuance of additional shares of the Company’s Class A common stock (Refer to Note 15, “Shareholders’ Equity,” for further discussion of Reorganization Transactions and the IPO). Earnings per share information for the three and nine months ended September 30, 2018 has been presented on a prospective basis and reflects only the net income (loss) available for holders of Class A common stock, as well as both basic and diluted weighted average Class A common stock outstanding, for the three months ended September 30, 2018 and for the period from May 23, 2018 through September 30, 2018. Earnings per share information prior to May 23, 2018 is not presented since the ownership structure of EVO, LLC is not a common unit of ownership. The following table sets forth the computation of the Company's basic and diluted net income per Class A common share (in thousands, except share and per share data): Three Months Ended September 30, May 23 - 2018 2018 Numerator: Net income attributable to EVO Payments, Inc. $ (27,389) $ (10,675) Denominator: Weighted average Class A common stock outstanding 18,163,344 17,901,484 Effect of dilutive securities — — Total dilutive securities 18,163,344 17,901,484 Earnings per share: Basic $ (1.51) $ (0.60) Diluted $ (1.51) $ (0.60) Antidilutive securities: Stock options 2,097,054 2,097,054 RSUs 499,510 499,510 Convertible Class C common stock 2,560,955 2,560,955 Convertible Class D common stock 17,282,930 17,282,930 Unit Appreciation Rights 58,809 58,809 Earnings per share is not separately presented for Class B common stock, Class C common stock and Class D common stock since they have no economic rights to the income or loss of EVO, Inc. Class B common stock is not considered when calculating dilution as this class of common stock may not convert to Class A common stock. Class C common stock and Class D common stock are considered in the dilution calculation as these classes have exchange rights to Class A common stock that could result in additional Class A common stock being issued, however, these shares are currently in a net loss position and are therefore anti-dilutive. Refer to Note 15, “Shareholders’ Equity,” for further information on rights to each class of stock. |
Tax Receivable Agreement
Tax Receivable Agreement | 9 Months Ended |
Sep. 30, 2018 | |
Tax Receivable Agreement | |
Tax Receivable Agreement | (3) In connection with the IPO, the Company entered into a Tax Receivable Agreement (“TRA”) that requires the Company to make payments to the Continuing LLC Owners, as defined in Note 15, “Shareholders’ Equity,” that are generally equal to 85% of the applicable cash tax savings, if any, realized as a result of favorable tax attributes that will be available to the Company as a result of the Reorganization Transactions, exchanges of EVO, LLC interests for Class A common stock, and payments made under the TRA. Payments will occur only after the filing of U.S. federal and state income tax returns and realization of cash tax savings from the favorable tax attributes. The first payment is due between 95 to 125 days after the filing of the Company’s tax return for the year ended December 31, 2018, which is due April 15, 2019, however, the due date can be extended until October 15, 2019. As a result of the exchange of LLC Interests and shares of Class D common stock for shares of Class A common stock sold in connection with the IPO and Secondary Offering, the Company recorded a deferred tax asset of $49.9 million associated with the increase in tax basis. Payments to the Continuing LLC Owners related to the purchases, the exchanges as described in Note 15, “Shareholders’ Equity,” of the accompanying unaudited condensed consolidated financial statements, will aggregate to approximately $42.4 million, ranging from zero to $3.6 million per year over the next 15 years. The Company recorded a corresponding increase to paid-in capital for the difference between the TRA liability and the related deferred tax asset. As of September 30, 2018, the Company’s remaining deferred tax asset and payment liability pursuant to the TRA were approximately $49.9 million and $42.4 million, respectively. The amounts recorded as of September 30, 2018 approximate the current estimate of expected tax savings and are subject to change after the filing of the Company’s U.S. federal and state income tax returns for the year ending December 31, 2018. Future payments under the TRA with respect to subsequent exchanges would be in addition to these amounts. For the TRA, the cash savings realized by the Company are computed by comparing the actual income tax liability of the Company to the amount of such taxes the Company would have been required to pay had there been no increase to the tax basis of the assets of EVO, LLC as a result of the purchase or exchange of LLC Interests, had there been no tax benefit from the tax basis in the intangible assets of EVO, LLC on the date of the IPO and had there been no tax benefit as a result of the Net Operating Losses (“NOLs”) generated by the increase in our tax basis of the assets in EVO, LLC. Subsequent adjustments of the TRA obligations due to certain events (e.g. changes to the expected realization of NOLs or changes in tax rates) will be recognized within operating expenses in the unaudited condensed consolidated statement of operations and comprehensive loss. |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2018 | |
Acquisitions | |
Acquisitions | (4) 2018 Acquisitions (a) EVO Payments International Corp. - Canada In February 2018, a subsidiary of EVO, Inc. acquired the remaining 30% membership interest in EVO Payments International Corp. - Canada (“EVO Canada”) from 7097794 Canada, Inc. for $0.9 million of contingent consideration. This transaction resulted in a reduction to members’ deficit and nonredeemable non-controlling interests of $0.4 million and $0.5 million, respectively. EVO Canada is presented in our North America segment. (b) Nationwide Payment Solutions, LLC In March 2018, a subsidiary of EVO, Inc. acquired the remaining 38% membership interest in Nationwide Payment Solutions, LLC (“NPS”) for an upfront payment of $16.9 million and contingent consideration of $3.8 million to be paid on March 23, 2019. This transaction resulted in a reduction to members’ deficit and nonredeemable non-controlling interests of $20.1 million and $0.6 million, respectively. NPS is presented in our North America segment. (c) Liberbank, S.A. In April 2018, a subsidiary of EVO, Inc. acquired a portion of the merchant acquiring assets of Liberbank, S.A. and Banco de Castilla la Mancha, S.A. for €7.9 million ($9.5 million, based on the foreign exchange rate at the time of the acquisition). This asset acquisition is presented in our Europe segment. Equipment and intangible assets acquired consist of card processing equipment, merchant contract portfolios, marketing alliance agreements, and trademarks with useful lives of 3 years, 5 years, 15 years, and 15 years, respectively. (d) Nodus Technologies, Inc. In May 2018, a subsidiary of EVO, Inc. completed the acquisition of 100% of the outstanding shares of Nodus Technologies, Inc. (“Nodus”) for $18.0 million. The total consideration includes a holdback liability of $0.8 million. Nodus is presented in our North America segment. The pro forma impact of this acquisition was not material to the Company’s historical consolidated operating results and is, therefore, not separately presented. Equipment and intangible assets consist of office equipment, computer software, merchant contract portfolios, trademarks, internally developed software, and non-competition agreements with useful lives of 5 to 7 years, 3 years, 15 years, 20 years, 10 years and 3 years, respectively. (e) Federated Payment Systems, LLC/Federated Payment Canada Corp. On September 28, 2018, a subsidiary of EVO, Inc. completed the acquisition of the remaining 67% of the outstanding membership interests of Federated Payment Systems, LLC (“Federated US”) and 100% of the outstanding shares of Federated Payment Canada Corporation (“Federated Canada”, together with Federated US “Federated”) for $37.1 million. The total consideration includes an aggregate holdback liability of $0.5 million. Federated maintains diverse sales channels which will complement the Company’s strategic distribution relationships. As a result of this acquisition, the Company recognized goodwill. Federated is presented in our North America segment. The preliminary allocation of the purchase price to the assets acquired and liabilities assumed was not yet finalized as of September 30, 2018. The preliminary purchase price was allocated to Federated’s net tangible and intangible assets based upon their estimated fair value as of the date of acquisition. Based upon the purchase price, the Company’s understanding of the Federated business and preliminary valuation, the allocation is as follows (in thousands): Tangible assists acquired $ 1,863 Amortizable intangible assets Trademarks 2,650 Merchant contract portfolios 19,036 Goodwill 23,328 Total assets acquired 46,877 The valuation and estimated useful lives of the intangible assets acquired are provisional and subject to adjustment based upon additional information that the Company is in the process of obtaining. On the date of acquisition, the book value of the investment in Federated US was zero. The Company recorded a gain on acquisition of unconsolidated investee of $8.7 million to step up carrying value of the investment to fair value as of the acquisition date. The gain on acquisition of unconsolidated investee has been recorded on the unaudited condensed consolidated statements of operations and comprehensive loss. Goodwill totaling $23.3 million represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired. Goodwill generated from the Federated acquisition is deductible for income tax purposes. Pro forma information has not been presented because the effect of this acquisition was not material on the Company’s consolidated operating results. 2017 Acquisitions (f) Sterling Payment Technologies, LLC In January 2017, a subsidiary of EVO, Inc. completed the acquisition of 100% of outstanding units of Sterling Payment Technologies, LLC (“Sterling”) for $196.8 million, including deferred purchase price of $71.2 million, a holdback liability of $0.2 million and an estimated working capital adjustment of $0.3 million. The Company agreed to a deferred purchase price of $70.0 million which was paid in full in May 2018. Total costs incurred in connection with this acquisition were $1.3 million and are presented in selling, general and administrative expenses. Sterling is presented in our North America segment. The table below presents the allocation of the purchase price of Sterling to the assets acquired and liabilities assumed based on their fair values. As of the acquisition date (In thousands) Cash and cash equivalents $ 601 Accounts receivable 945 Prepaid expenses and other 905 Inventory 851 Equipment and improvements 2,711 Amortizable intangible assets Trademarks 14,400 Internally developed software 7,300 Non-competition agreements 6,200 Merchant contract portfolios 27,300 Marketing alliance agreements 30,200 Accounts payable and accrued expenses (2,626) Total net fair value excluding goodwill 88,787 Goodwill 107,978 Total purchase price $ 196,765 Intangible assets consist of an indefinite lived trade name, internally developed software, non-competition agreements, marketing alliance agreements and merchant contract portfolios with useful lives of 7 years, 2 to 4 years, 18 to 21 years, and 12 to 18 years, respectively. Multiple assets were acquired for each of the following classes of asset resulting in variability in the assets useful life: non-competition agreements, marketing alliance agreements and merchant contract portfolios. Acquired goodwill is expected to be tax deductible. The Company views this acquisition as an important part of its long-term strategy of expanding the Company’s business domestically and the goodwill arising from the acquisition was attributable to strategic benefit and growth opportunities, including alternative sales channels and operating synergies that the Company expects to realize. (g) Vision Payments Solutions, LLC In March 2017, a subsidiary of EVO, Inc. acquired the remaining 25% membership interest in Vision Payments Solutions, LLC (“VPS”) from Vision Payments Solutions, Inc., resulting in a reduction to members’ deficit and nonredeemable non-controlling interests of $0.4 million. VPS is presented in our North America segment. (h) Pineapple Payments, LLC In April 2017, a subsidiary of EVO, Inc. acquired the remaining 75% of the units of Pineapple Payments, LLC (“Pineapple”) for $8.4 million, inclusive of contingent consideration of $0.7 million. Pineapple is presented in our North America segment. The pro forma impact of this acquisition was not material to the Company’s historical consolidated operating results and is, therefore, not presented. Intangible assets consist of merchant contract portfolios and marketing alliance agreements with useful lives of 7 years and 5 years, respectively. (i) In May 2017, a subsidiary of EVO, Inc. acquired the remaining 49% membership interest in Zenith Merchant Services, LLC (“Zenith”) for $9.2 million, inclusive of contingent consideration of $2.8 million. The transaction resulted in an increase to members’ deficit and reduction to nonredeemable non-controlling interests of $6.8 million and $2.4 million, respectively. Zenith is presented in our North America segment. |
Equipment and Improvements
Equipment and Improvements | 9 Months Ended |
Sep. 30, 2018 | |
Equipment and Improvements | |
Equipment and Improvements | (5) Equipment and improvements consisted of the following: Estimated Useful Lives in September 30, December 31, Years 2018 2017 (In thousands) Card processing 3-5 $ 117,817 $ 102,789 Office equipment 3-5 41,473 37,476 Computer software 3 47,236 38,669 Leasehold improvements various 16,044 12,764 Furniture and fixtures 5-7 6,160 5,410 Totals 228,730 197,108 Less accumulated depreciation (127,707) (106,889) Foreign currency translation adjustment 908 6,368 Totals $ 101,931 $ 96,587 Depreciation expense related to equipment and improvements was $9.1 million and $7.7 million for the three months ended September 30, 2018 and 2017, respectively. Depreciation expense related to equipment and improvements was $27.6 million and $22.0 million for the nine months ended September 30, 2018 and 2017, respectively. In the nine months ended September 30, 2018 , equipment and improvements and accumulated depreciation were each reduced by $8.5 million and $7.6 million, respectively, and in the nine months ended September 30, 2017 by $3.4 million and $3.4 million, respectively, primarily related to asset retirements. The Company infrequently sells or disposes of assets that are not fully depreciated, and this activity represents an insignificant portion of the total reduction. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets | |
Goodwill and Intangible Assets | (6) Intangible assets, net consist of the following: September 30, December 31, 2018 2017 (In thousands) Intangible assets with finite lives: Merchant contract portfolios: Gross carrying value $ 301,855 $ 274,780 Accumulated amortization (131,545) (113,747) Accumulated impairment losses (5,658) (5,658) Foreign currency translation adjustment (25,212) (26,057) Net 139,440 129,318 Marketing alliance agreements: Gross carrying value 191,924 187,758 Accumulated amortization (44,772) (35,509) Accumulated impairment losses (7,585) (7,585) Foreign currency translation adjustment (14,925) (15,561) Net 124,642 129,103 Trademarks, finite-lived: Gross carrying value 29,931 25,084 Accumulated amortization (10,141) (8,485) Foreign currency translation adjustment (4,270) (3,701) Net 15,520 12,898 Internally developed software: Gross carrying value 56,940 42,442 Accumulated amortization (12,736) (9,760) Accumulated impairment losses (9,324) (9,324) Foreign currency translation adjustment (3,623) (3,247) Net 31,257 20,111 Non-competition agreements: Gross carrying value 6,400 6,200 Accumulated amortization (4,636) (2,633) Net 1,764 3,567 Total finite-lived, net 312,623 294,997 Trademarks, indefinite-lived: Gross carrying value 18,499 18,486 Total intangible assets, net $ 331,122 $ 313,483 Amortization expense related to intangible assets was $11.5 million and $12.1 million for the three months ended September 30, 2018 and 2017, respectively. Amortization expense related to intangible assets was $33.7 million and $33.4 million for the nine months ended September 30, 2018 and 2017, respectively. Estimated amortization expense to be recognized during each of the five years subsequent to September 30, 2018: Amount (In thousands) Years ending: 2018 (remainder for the year) $ 16,033 2019 46,772 2020 42,017 2021 37,345 2022 32,390 2023 and thereafter 138,066 Total $ 312,623 The following represents net intangible assets by segment: September 30, December 31, 2018 2017 (In thousands) Intangible assets, net: North America Merchant contract portfolios $ 105,465 $ 89,045 Marketing alliance agreements 80,295 82,604 Trademarks, finite-lived 4,121 — Internally developed software 18,261 10,431 Non-competition agreements 1,764 3,567 Trademarks, indefinite-lived 18,499 18,486 Total 228,405 204,133 Europe Merchant contract portfolios 33,975 40,273 Marketing alliance agreements 44,347 46,499 Trademarks, finite-lived 11,399 12,898 Internally developed software 12,996 9,680 Total 102,717 109,350 Total intangible assets, net $ 331,122 $ 313,483 Goodwill activity for the nine months ended September 30, 2018, in total and by reportable segment, was as follows: Reportable Segment North America Europe Total (In thousands) Goodwill, gross, as of December 31, 2017 $ 196,126 $ 139,843 $ 335,969 Accumulated impairment losses — (24,291) (24,291) Goodwill, net, as of December 31, 2017 196,126 115,552 311,678 Business combinations 34,294 — 34,294 Foreign currency translation adjustment 1,579 (5,456) (3,877) Goodwill, net as of September 30, 2018 $ 231,999 $ 110,096 $ 342,095 For the nine months ended September 30, 2018 and 2017, there was no goodwill or long-lived asset impairment. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions | |
Related Party Transactions | (7) Related Party Transactions Some of the board members and officers of EVO, Inc. have partial ownership interests in certain related companies. The Company advances funds to and receives funds from these related companies, incurs commission expense, and sells equipment and services to these companies. The related party commission expense amounted to $4.3 million and $9.8 million for the three months ended September 30, 2018 and 2017, respectively. The related party commission expense amounted to $13.8 million and $30.6 million for the nine months ended September 30, 2018 and 2017, respectively. The sale of equipment and services amounted to less than $0.1 million and $0.1 million for the three months ended September 30, 2018 and 2017 . The sale of equipment and services amounted to $0.2 million and $0.4 million for the nine months ended September 30, 2018 and 2017, respectively. Related party balances consist of the following: September 30, December 31, 2018 2017 (In thousands) Receivables from sale of POS devices and peripherals $ 1,447 $ 1,609 Receivables from related companies 876 974 Notes receivable, short term 8 42 Due from related parties, short term $ 2,331 $ 2,625 Notes receivable, long term 923 109 Due from related parties, long term $ 923 $ 109 Liabilities to related companies 4,597 7,847 Due to related parties, short term $ 4,597 $ 7,847 ISO commission reserve 385 675 Due to related parties, long term $ 385 $ 675 Madison Dearborn Partners, LLC (“MDP”), a member of EVO, LLC and shareholder of EVO, Inc., provides the Company with consulting services on an as needed basis. In addition, the Company will reimburse MDP for certain out of pocket expenses. MDP primarily provides consulting services related to business development, financing matters, and potential acquisition activities. The Company reimbursed less than $0.1 million in expenses to MDP for the three and nine months ended September 30, 2018 and less than $0.1 million and $5.7 million for the three and nine months ended September 30, 2017, respectively. Additionally, the Company provides certain treasury, payroll, tax preparation and other services to Blueapple Inc. (“Blueapple”), a member of EVO, LLC and owner of all outstanding shares of Class B common stock of EVO, Inc. The expense related to these services was less than $0.1 million and $0.1 million for the three months ended September 30, 2018 and 2017, respectively. The expense related to these services was $0.1 million and $0.2 million for the nine months ended September 30, 2018 and 2017. In connection with the IPO, the Company paid Blueapple $2.4 million in satisfaction of obligation to pay any further commissions to Blueapple and all such future revenue will be retained by the Company. The Company provided card-based processing services and risk assessment to Federated Payment Systems, LLC (“Federated US”) in the ordinary course of business. The Company also held a one-third ownership position in Federated US, while JGRG Equities, LLC, an entity wholly owned by relatives of the Company’s chairman, and an unrelated third party each also held a one-third ownership position prior to the Federated acquisition as described in Footnote 4. The Company received a nominal fee for providing services to Federated US. The Company had a right to hold a reserve on Federated US’s merchant transaction proceeds to secure potential losses the Company may have incurred in connection with the services it provided to Federated US. For the three months ended September 30, 2018 and 2017, the Company received $0.1 million in revenues in connection with providing services to Federated US. For the nine months ended September 30, 2018 and 2017, the Company received $0.4 million in revenues in connection with providing services to Federated US. EVO, LLC also relied on Federated Canada to provide certain marketing services to the Company’s business in Canada. While the Company did not hold a direct ownership interest in Federated Canada, the Company’s chairman held a one third interest in Federated Canada position prior to the Federated acquisition as described in Footnote 4. For the three months ended September 30, 2018 and 2017, the Company paid $1.9 million and $2.3 million, respectively in fees to Federated Canada for these services. For the nine months ended September 30, 2018 and 2017, the Company paid $5.8 million and $6.4 million, respectively in fees to Federated Canada for these services. Due to the acquisition of Federated on September 28, 2018, all accrued liabilities have been excluded from the schedule above as this activity will now eliminate in consolidation. Prior period amounts continue to reflect balances between the Company and Federated as related party. The Company leases office space located at 515 Broadhollow Road in Melville, New York for $0.1 million per month from 515 Broadhollow, LLC. 515 Broadhollow, LLC is majority owned, directly and indirectly, by the Company’s chairman. Receivables from related companies include amounts receivable from members of EVO, LLC and shareholders of the Company of $0.6 million and $0.8 million and receivables from minority held affiliates of $0.7 million and $0.3 million as of September 30, 2018 and December 31, 2017, respectively. In connection with the vesting of the Class A restricted shares, the Company issued loans to certain employees for the purposes of paying withholding taxes. As of September 30, 2018, the amount outstanding for loans to certain employees was $0.9 million. The Company, through one wholly owned subsidiary and one minority held affiliate, conducts business under ISO agreements with a relative of the Company’s chairman pursuant to which the relative provides certain marketing services and equipment in exchange for a commission based on the volume of transactions processed for merchants acquired by the related party. For the three months ended September 30, 2018 and 2017, the Company paid $0.1 million for commissions paid related to this activity. For the nine months ended September 30, 2018 and 2017, the Company paid $0.4 million and $0.2 million, respectively, for commissions paid related to this activity. NFP is the Company’s benefit broker and 401(k) manager. NFP is a portfolio company of MDP and one of the Company’s executive officers maintains a minority ownership interest in NFP. For the three months ended September 30, 2018 and 2017, the Company paid less than $0.1 million in commissions and other expenses to NFP. For the nine months ended September 30, 2018 and 2017, the Company paid $0.1 million and $0.2 million, respectively, in commissions and other expenses to NFP. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2018 | |
Income Taxes | |
Income Taxes | (8) In accordance with ASC 740, Income Taxes , each interim period is considered integral to the annual period, and tax expense is measured using an estimated annual effective tax rate. An entity is required to record income tax expense each quarter based on its best estimate of the annual effective tax rate for the full fiscal year and use that rate to provide for income taxes on a current year-to-date basis, as adjusted for discrete taxable events that occur during the interim periods. If, however, the entity is unable to reliably estimate its annual effective tax rate, then the actual effective tax rate for the year-to-date may be the best estimate of the entity’s annual effective tax rate. For the nine months ended September 30, 2018, the Company determined that it was unable to make a reliable estimate of its annual effective tax rate due to the sensitivity of the rate as it relates to its forecasted full year 2018 results. Therefore, the Company recorded a tax expense for the nine months ended September 30, 2018 based on its actual effective tax rate for the nine months ended September 30, 2018. The Company’s effective tax rate (“ETR”) was 388.5% and (11.1)% for the three and nine months ended September 30, 2018, respectively. The effective tax rate for the three and nine months ended September 30, 2018 differs from the statutory federal rate primarily due to foreign income taxes, the tax treatment of income attributable to non-controlling interests, and the exclusion of tax benefits related to losses recorded in certain foreign operations. The income attributable to the non-controlling interests is taxable to EVO, LLC’s individual owners and not to the Company itself. Income tax liabilities are incurred with respect to foreign operations whereas income of EVO, LLC in the U.S. flows through and is taxable to EVO, LLC’s owners, including the Company. The Company’s deferred tax asset increased from December 31, 2017 to September 30, 2018 primarily due to the increase in the tax basis of the assets of EVO, LLC as a result of the Reorganization Transactions and exchanges of EVO, LLC interests for Class A common stock of the Continuing LLC Owners. The Company’s ETR was (114.0)% and (88.8)% for the three and nine months ended September 30, 2017, respectively. The effective tax rate for the three and nine months ended September 30, 2017 differs from the statutory federal rate primarily due to foreign income taxes. Income tax liabilities are incurred with respect to foreign operations whereas income of EVO, LLC in the U.S. flows through and is taxable to EVO, LLC’s owners. Management assesses the available evidence to estimate whether sufficient future taxable income will be generated to use existing deferred tax assets. A significant piece of objective, negative evidence evaluated was the cumulative loss incurred over the preceding twelve month period ended September 30, 2018 in certain jurisdictions. Such objective evidence limits the ability to consider other subjective evidence such as our projections of future growth. On the basis of this assessment, valuation allowances were established in prior periods to reduce the carrying amount of deferred tax assets to an amount that is more likely than not to be realized in certain European jurisdictions. Release of a valuation allowance would result in the realization of all or a portion of the related deferred tax assets and a decrease to income tax expense for the period in which the release is recorded. Based on our assessment, no material changes to our valuation allowances were recorded during the nine months ended September 30, 2018. On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (“Tax Reform”). Tax Reform makes broad changes to U.S. federal tax law, including, but not limited to (1) reducing the U.S. federal corporate tax rate from 35% to 21%; (2) the acceleration of expensing certain business assets; (3) further limiting deductibility of executive compensation; (4) additional limitations on the deductibility of interest expense; and (5) limiting the NOL carryforward deduction to 80% of taxable income for losses arising in taxable years ending after December 31, 2017. The SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”) to address situations where a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting under ASC Topic 740 for certain income tax effects of Tax Reform for the reporting period of enactment. SAB 118 allows the Company to provide a provisional estimate of the impacts of Tax Reform during a measurement period similar to the measurement period used when accounting for business combinations. Adjustments to provisional estimates and additional impacts from Tax Reform must be recorded as they are identified during the measurement period as provided for in SAB 118. The Company continues to analyze the effects of Tax Reform and will record adjustments and additional impacts from Tax Reform as they are identified during the measurement period as provided for in SAB 118. |
Long-Term Debt and Credit Facil
Long-Term Debt and Credit Facilities | 9 Months Ended |
Sep. 30, 2018 | |
Long-Term Debt and Credit Facilities | |
Long-Term Debt and Credit Facilities | (9) Credit Facility On December 22, 2016, EVO Payments International, LLC (“EPI”), a subsidiary of EVO, Inc., entered into a credit agreement (“Senior Secured Credit Facilities”). The Senior Secured Credit Facilities consisted of a first lien senior secured credit facility totaling $670.0 million (comprised of a $100.0 million revolver and a $570.0 million term loan) and second lien senior secured credit facility comprised of a $175.0 million term loan. On October 24, 2017, the Company entered into an incremental amendment agreement to upsize the existing first lien revolver from $100.0 million to $135.0 million. On April 3, 2018, the Company entered into a second incremental amendment agreement to the first lien credit facility, which increased the existing term loan credit facility by $95.0 million to $665.0 million. As a result of this second incremental amendment, $0.9 million in existing deferred financing was expensed as debt extinguishment loss related to the significant modification of a certain lender’s commitment within the syndicate and is classified as other expense in the unaudited condensed consolidated statements of operations and comprehensive loss. On May 25, 2018, the Company paid in full the second lien term loan in the amount of $178.2 million including $1.5 million of accrued interest and $1.8 million of prepayment penalty. On June 14, 2018, the Company entered into a restatement agreement (the “Restatement Agreement”) whereby the syndicate lenders agreed to replace their existing term loans with replacement term loans. In addition, the Restatement Agreement increased the first lien revolver by $65.0 million to $200.0 million and extended the maturity date of the first lien revolver to June 14, 2023. As a result of the Restatement Agreement, $1.2 million in existing deferred financing costs were expensed as debt extinguishment loss related to the significant modification of a certain lender’s commitment within the syndicate and is classified as other expense in the unaudited condensed consolidated statements of operations and comprehensive loss. EVO, LLC utilized the net proceeds from the Secondary Offering to pay down the Senior Secured Credit Facilities first lien revolver and to pay the installment payment on the Senior Secured Credit Facilities first lien term loan which was paid on September 27, 2018. The Senior Secured Credit Facilities provide the Company with the capacity to support both domestic and international growth, as well as fund general operating needs. The loans under the Senior Secured Credit Facilities bear interest, at the Company’s election, at the prime rate or London Interbank Offered Rate (LIBOR), plus leverage based margin. Under the Restatement Agreement, the lenders agreed to reduce the applicable leverage based margins. As of September 30, 2018, the loans under the Senior Secured Credit Facilities had an interest rate of 7.00% for revolving credit facility loans, 5.49% for first lien term loans. The Senior Secured Credit Facilities requires quarterly principal payments of the first lien secured credit facility of $1.6 million commencing on June 30, 2018 through September 30, 2023. The revolving credit facility and first lien term loan mature on June 14, 2023 and December 22, 2023, respectively. All amounts outstanding under the Senior Secured Credit Facilities are secured by a pledge of certain assets of EPI, as well as secured guarantees provided by certain of EPI’s controlled subsidiaries. The Senior Secured Credit Facilities also contain a number of significant negative covenants. These covenants, among other things, restrict, subject to certain exceptions, EPI’s and its controlled subsidiaries, ability to: incur indebtedness; create liens; engage in mergers or consolidations; make investments, loans and advances; pay dividends or other distributions and repurchase capital stock; sell assets; engage in certain transactions with affiliates; enter into sale and leaseback transactions; make certain accounting changes; and make prepayments on junior indebtedness. The first lien senior secured credit facility also contains a springing financial covenant that requires EPI to remain under a maximum consolidated leverage ratio determined on a quarterly basis. In addition, the Senior Secured Credit Facilities contain certain customary representations and warranties, affirmative covenants and events of default. If an event of default occurs, the lenders under the Senior Secured Credit Facilities will be entitled to take various actions, including the acceleration of amounts due thereunder and exercise of the remedies on the collateral. As of September 30, 2018 and 2017, the Company was in compliance with all its financial covenants. In conjunction with the acquisition of Sterling, a subsidiary of the Company agreed to a deferred purchase price of $70.0 million which accrued interest at a rate of 5% per annum and was payable in quarterly installments of $5.0 million, plus accrued and unpaid interest. In May 2018, the Company paid in full the outstanding balance of $57.4 million of the Sterling deferred purchase price, utilizing proceeds from the IPO and funds drawn from the revolving credit facility of $ 4.8 million. Long-term debt consists of the following: September 30, December 31, 2018 2017 (In thousands) First lien term loan $ 656,404 $ 566,075 Second lien term loan — 175,206 First lien revolver 39,212 44,632 Deferred purchase price — 68,720 Letter of credit — 1,000 Less debt issuance costs (13,656) (19,679) Total long-term debt 681,960 835,954 Less current portion of long-term debt (7,416) (75,008) Total long-term debt, net of current portion $ 674,544 $ 760,946 Principal payment requirements on the above obligations in each of the years remaining subsequent to September 30, 2018 are as follows: Amounts (In thousands) Years ending December 31: 2018 (remainder of the year) $ 2,461 2019 6,593 2020 6,593 2021 6,593 2022 6,593 2023 and thereafter 666,783 $ 695,616 Settlement Lines of Credit The Company maintains intraday and overnight facilities to fund its settlement obligations. These facilities are short-term in nature. During the nine months and year ended September 30, 2018 and December 31, 2017, respectively, the Company entered into the following settlement lines of credit. On December 1, 2017, a subsidiary of the Company entered into a revolving line of credit facility with Deutsche Bank A.G., as the lender, and EVO, LLC, as the guarantor. The facility provides the Company with access to settlement related funding. Under the facility, the Company can withdraw up to the lesser of $35.0 million or 90% of the aggregate dollar amount of eligible settlement receivables due. The loans drawn under the facility bear interest at the prime rate plus 1.5%. At September 30, 2018, this interest rate was 6.75%. The loans drawn under the facility do not have a maturity date. As of September 30, 2018 and December 31, 2017, the loan amounts drawn under the facility were $14.4 million and $12.6 million, respectively. On December 19, 2017, a subsidiary of the Company entered into a revolving line of credit facility with Wells Fargo Bank N.A., as the lender, and EVO, LLC, as the guarantor. The facility provides the Company with access to settlement related funding. Under the facility, the Company can withdraw up to $10.0 million. On May 29, 2018, the Company entered into an incremental amendment agreement to the revolving line credit facility, pursuant to which the maximum amount that can be withdrawn was increased to $15.0 million. The loans drawn under the facility bear interest at the prime rate plus 1.0%. At September 30, 2018, this interest rate was 6.25%. The loans drawn under the facility mature on December 19, 2018. As of September 30, 2018 and December 31, 2017, the loan amounts drawn under the facility were $11.2 million and $9.9 million, respectively. On September 6, 2018, a subsidiary of the Company entered into an overdraft facility with PKO Bank Polski, as the lender, and Centrum Elektronicznych Uslug Platniczych eService Sp. z o. o. (“eService”) and EPI, as the guarantors. The facility provides the Company with access to settlement related funding. Under the facility, the Company can withdraw up to CZK 100.0 million. The loans drawn under the facility bear interest at the Prague Interbank Offered Rate (“PRIBOR”) plus 1.5%. At September 30, 2018, this interest rate was 2.87%. The loans drawn under the facility have a maturity date of September 9, 2019. As of September 30, 2018, the loan amount drawn under the facility was less than $0.1 million. |
Supplemental Cash Flows Informa
Supplemental Cash Flows Information | 9 Months Ended |
Sep. 30, 2018 | |
Supplemental Cash Flows Information | |
Supplemental Cash Flows Information | (10) Supplemental cash flow disclosures and noncash investing and financing activities are as follows for the nine months ended September 30, 2018 and 2017: 2018 2017 (In thousands) Supplemental disclosure of cash flow data: Interest paid $ 37,819 $ 42,617 Income taxes paid, net of refunds 5,672 8,249 Supplemental disclosure of noncash investing and financing activities: Contingent consideration payable 6,400 3,564 Contingent consideration settled with the issuance of Class A common stock 771 — Deferred purchase price $ — $ 71,200 |
Redeemable Non-controlling Inte
Redeemable Non-controlling Interests | 9 Months Ended |
Sep. 30, 2018 | |
Redeemable Non-controlling Interests | |
Redeemable Non-controlling Interests | (11) The Company owns 66% of eService, the Company’s Polish subsidiary. The eService shareholders’ agreement includes a provision whereby PKO Bank Polski, beginning on January 1, 2018, has the option to compel the Company to purchase 14% of the shares of eService held by PKO Bank Polski, at a price per share based on their fair value. Commencing on January 1, 2020, PKO Bank Polski may exercise an option to sell all of its remaining shares of eService to the Company. Because this option is not solely within the Company’s control, the Company has classified this interest as a redeemable non-controlling interests (“RNCI”) and reports the redemption value in the mezzanine section of the unaudited condensed consolidated balance sheets. On a recurring basis, the RNCI will be reported at redemption value with a corresponding adjustment to accumulated deficit, which represents fair value. As of September 30, 2018, EVO, Inc. owns 31.3% of EVO, LLC. The EVO, LLC operating agreement includes a provision whereby Blueapple may deliver a sale of notice to EVO, Inc., upon receipt of which EVO, Inc. will use its commercially reasonable best efforts to pursue a public offering of shares of its Class A common stock and use the net proceeds therefrom to purchase LLC Interests from Blueapple. Upon receipt of such a sale notice, the Company may elect, at the Company’s option (determined solely by its independent directors (within the meaning of the rules of the NASDAQ stock market (“NASDAQ”)) who are disinterested), to cause EVO, LLC to instead redeem the applicable LLC Interests for cash; provided that Blueapple consents to any election by the Company to cause EVO, LLC to redeem the LLC Interests based on the fair value of the shares on such date. Because this option is not solely within the Company’s control, the Company has classified this interest as RNCI and reports the redemption value in the mezzanine section of the unaudited condensed consolidated balance sheets and will be reported at redemption value with a corresponding adjustment to accumulated deficit, which represents fair market value, on a recurring basis. The following table details the components of RNCI for the nine months ended September 30, 2018 and for the year ended December 31, 2017: Pre-IPO Post-IPO May 23, September 30, December 31, 2018 2018 2017 (In thousands) Beginning balance $ 148,266 $ 689,569 $ 100,530 Acquired redeemable non-controlling interests — — — Net income attributable to redeemable non-controlling interests - eService 1,291 2,794 5,465 Net income attributable to redeemable non-controlling interests - Blueapple — (27,853) — Gain (loss) on OCI - eService (2,104) (1,355) 10,662 Gain (loss) on OCI - Blueapple — 544 — Legacy accumulated deficit allocation (150,485) — — Legacy AOCI allocation (39,404) — — Increase (decrease) in the maximum redemption amount of redeemable non-controlling interests - eService — 9,742 34,985 redeemable non-controlling interests - Blueapple 735,775 296,839 — Distributions - eService (3,770) (1,004) (3,376) Ending balance $ 689,569 $ 969,276 $ 148,266 As a result of the above activity, the RNCI attributable to eService and Blueapple were $153.9 million and $815.4 million as of September 30, 2018, respectively, and $128.5 million and zero as of December 31, 2017, respectively. |
Fair Value
Fair Value | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value | |
Fair Value | (12) The table below presents information about items, which are carried at fair value on a recurring basis: September 30, 2018 (In thousands) Level 1 Level 2 Level 3 Total Cash equivalents $ 103,987 $ — $ — $ 103,987 Contingent consideration — — 8,075 8,075 Redeemable non-controlling interests - Blueapple — — 815,417 815,417 Redeemable non-controlling interests - eService — — 153,859 153,859 Total $ 103,987 $ — $ 977,351 $ 1,081,338 December 31, 2017 (In thousands) Level 1 Level 2 Level 3 Total Cash equivalents $ 110,537 $ — $ — $ 110,537 Contingent consideration — — 3,957 3,957 Redeemable non-controlling interests - Blueapple — — — — Redeemable non-controlling interests - eService — — 148,266 148,266 Total $ 110,537 $ — $ 152,223 $ 262,760 Cash equivalents consist of a money market fund that is valued using a market price in an active market (Level 1). Level 1 instrument valuations are obtained from real‑time quotes for transactions in active exchange markets involving identical assets. Contingent consideration relates to potential payments that the Company may be required to make associated with acquisitions. To the extent that the valuation of these liabilities are based on projected inputs that are less observable or not observable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for measures categorized in Level 3. In the determination of the fair value of the RNCI in eService, the Company used an income approach based on internal forecasts of expected future cash flows. Significant unobservable inputs included the Weighted Average Cost of Capital (“WACC”) used to discount the future cash flows, which was 17.5%, based on the markets in which the business operates and growth rate used within the future cash flows, which were between 3.0% and 25.6%, based on historic trends, current and expected market conditions, and management’s forecast assumptions. A future increase in the WACC would result in a decrease in the fair value of RNCI in eService. RNCI related to the Blueapple ownership of EVO, LLC is classified as Level 3. While the fair value is primarily derived from the fair value of EVO, Inc.’s closing stock price on the last day of the period, the Company applied a discount of 5% for lack of marketability resulting from the lock-up period, which prevents Blueapple from exercising its put option for six months from the IPO date. The carrying amounts of receivables, settlement, due from related parties, due to related parties, settlement lines of credit, long-term debt and deferred cash considerations associated with acquisitions, approximate their fair value given the short-term nature or bearing at market interest rate value approximating carrying value. Visa preferred shares are carried at cost. The estimated fair value of the Visa preferred shares of $28.4 million as of September 30, 2018 is based upon inputs classified as Level 3 of the fair value hierarchy using the fair value of Visa preferred shares as of September 30, 2018 and disclosed conversion factor as of September 30, 2018, inclusive of a discount rate due to the lack of liquidity, which represents a measure of fair value that are unobservable or require management’s judgement. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies | |
Commitments and Contingencies | (13) (a) Leases As of September 30, 2018, the Company is obligated under various non-cancelable operating leases, the last of which expires in 2036. Minimum annual lease payments in each of the years subsequent to September 30, 2018 are as follows: Amount (In thousands) Years ending December 31: 2018 (remainder of year) $ 1,939 2019 7,793 2020 6,894 2021 5,865 2022 4,834 2023 and thereafter 16,842 Total $ 44,167 Rent expense, inclusive of real estate taxes, utilities, and maintenance incurred under operating leases totaled $3.8 million and $3.3 million for the three months ended September 30, 2018 and 2017, respectively, and is included in selling, general, and administrative expenses in the unaudited condensed consolidated statements of operations and comprehensive loss. Rent expense, inclusive of real estate taxes, utilities, and maintenance incurred under operating leases totaled $11.2 million and $9.5 million for the nine months ended September 30, 2018 and 2017, respectively. (b) Litigation The Company is party to various claims and lawsuits incidental to its business. In the opinion of management, the ultimate outcome of such matters, individually or in the aggregate, will not have a material adverse effect on the Company’s unaudited condensed consolidated financial position, results of operations or cash flows. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2018 | |
Segment Information | |
Segment Information | (14) Information on segments and reconciliations to revenue and net income attributable to the shareholders of EVO, Inc. and members of EVO, LLC are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 (In thousands) (In thousands) Segment revenue: North America $ 79,487 $ 75,042 $ 232,687 $ 216,956 Europe 65,271 57,604 181,244 149,209 Revenue $ 144,758 $ 132,646 $ 413,931 $ 366,165 Segment profit: North America $ 30,962 $ 21,372 $ 73,616 $ 57,009 Europe 15,985 16,101 42,657 41,495 Total segment profit 46,947 37,473 116,273 98,504 Corporate (8,518) (8,923) (31,879) (19,065) Depreciation and amortization (20,488) (19,806) (61,308) (55,479) Net interest expense (10,076) (15,626) (45,831) (45,565) Provision for income tax expense (32,155) (5,377) (7,974) (14,734) Share-based compensation expense (2,021) — (53,284) — Net loss attributable to EVO Investco, LLC $ (12,259) $ (36,339) Net (loss) income attributable to non-controlling interest of EVO Investco, LLC (1,078) 73,328 Net income attributable to EVO Payments, Inc. $ (27,389) $ (10,675) Capital expenditures: North America $ 7,010 $ 2,944 $ 19,802 $ 8,029 Europe 5,983 7,295 19,161 16,360 Consolidated total capital expenditures $ 12,993 $ 10,239 $ 38,963 $ 24,389 For the purpose of discussing segment operations, the Company refers to “segment profit” which is segment revenue less (1) segment expenses plus (2) segment income from unconsolidated investees plus (3) segment other income, net less (4) segment non-controlling interests of EVO, LLC consolidating entities. The expenses related to certain Company-wide governance functions, depreciation and amortization, and EVO, LLC non-controlling interests are not allocated to segments; they are reported in the captions “Corporate” and “Net income attributable to non-controlling interest of EVO Investco, LLC”, respectively. Information on segments and reconciliations to total assets are as follows: September 30, December 31, Segment total assets: 2018 2017 North America $ 1,138,628 $ 1,010,859 Europe 553,441 497,439 Total assets $ 1,692,069 $ 1,508,298 Revenue from external customers is attributed to individual countries based on the location where the relationship is managed. For the three months ended September 30, 2018, revenue from external customers in the United States, Poland and Mexico, as a percentage of revenues, were 37.1%, 24.1%, and 19.0%, respectively. For the three months ended September 30, 2017, revenue from external customers in the United States, Poland and Mexico, as a percentage of revenue, were 37.0%, 19.5%, and 22.8%, respectively. For the nine months ended September 30, 2018, revenue from external customers in the United States, Poland and Mexico, as a percentage of revenue, were 35.7%, 24.2%, and 19.9%, respectively. For the nine months ended September 30, 2017, revenue from external customers in the United States, Poland and Mexico, as a percentage of revenue, were 39.4%, 21.4%, and 19.8%, respectively. For the three and nine months ended September 30, 2018 and 2017, there is no one customer that represents more than 10% of revenue in the segments. |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Sep. 30, 2018 | |
Shareholders' Equity | |
Shareholders' Equity | (15) Structure prior to the Reorganization Transactions Prior to the completion of the Reorganization Transactions, EVO, LLC had limited liability company interests outstanding in the form of Class A units, Class B units, Class C units, Class D units and Class E units. EVO, LLC also granted unit appreciation rights (“UARs”) awards to certain of its officers and certain current and former employees. Immediately prior to the completion of the Reorganization Transactions, the limited liability company interests of EVO, LLC were beneficially owned as set forth below. The percentage of economic interest in EVO, LLC set forth below is based on a hypothetical liquidation of EVO, LLC based on the IPO price per share of $16.00 and the underwriting discounts and commission paid in the IPO. · Blueapple owned 6,374,245 Class A units, representing a 54.0% economic interest in EVO, LLC on a fully-diluted basis. · MDP owned an aggregate of 3,506,087 Class B units, representing a 29.7% economic interest in EVO, LLC on a fully-diluted basis. · Current and former management and employees owned an aggregate of 374,559 Class C units and 1,106,528 Class D units, representing a combined 6.9% economic interest in EVO, LLC on a fully-diluted basis. The Class D units were granted pursuant to the EVO, LLC Incentive Equity Plan and contained certain vesting restrictions, including time-based and performance-based conditions. The Class D units also contained a participation threshold used to determine if a particular grant was eligible to participate in distributions, including distributions made in connection with a sale, liquidation event or public offering. · Blueapple, MDP and certain members of management and current and former employees owned an aggregate of 1,011,931 Class E units, representing a combined 8.6% economic interest in EVO, LLC on a fully-diluted basis. · Management and current and former employees owned 297,121 vested unit appreciation rights awards. The unit appreciations rights awards were granted pursuant to the EVO, LLC Unit Appreciation Equity Plan and provided a right to the recipient to receive an amount in cash or other consideration equal to the value of a hypothetical Class D unit in connection with a sale, liquidation event or public offering. Reorganization Transactions In connection with the IPO, the Company consummated the following Reorganization Transactions. · All of the outstanding limited liability company interests in EVO, LLC were reclassified into a single class of LLC Interests. The number of LLC Interests issued to each member of EVO, LLC was determined based on a hypothetical liquidation of EVO, LLC. · All time-based and performance-based vesting conditions applicable to EVO, LLC’s outstanding unvested Class D units were waived in connection with the reclassification of the outstanding limited liability interests in EVO, LLC into LLC Interests. Our current and former executive officers collectively held 720,986 Class D units and collectively received 1,721,115 LLC Interests in connection with the reclassification of those Class D units. Our current and former employees collectively held 385,542 Class D units and collectively received 951,548 LLC Interests in connection with the reclassification of those Class D units. · Affiliates of MDP holding a portion of the Class E units held by MDP engaged in a series of transactions that resulted in the MDCP VI-C Cardservices II Blocker Corp. (“MDP Blocker Sub”) merging with and into EVO, Inc., with EVO, Inc. remaining as the surviving corporation. At the time of the merger, the MDP Blocker Sub only owned Class E units in EVO, LLC. As a result of these transactions, an affiliate of MDP exchanged all of their equity interests in the MDP Blocker Sub for 652,500 shares of our Class A common stock. · The Company amended and restated EVO, Inc.’s certificate of incorporation to, among other things, provide for Class A common stock, Class B common stock, Class C common stock and Class D common stock. The terms of each class of our common stock are described in the 2018 Omnibus Incentive Plan (the “2018 Plan”). · The Company issued 15,433,333 shares of our Class A common stock (which includes 2,100,000 shares issued on May 30, 2018 upon exercise of the underwriters option to purchase additional shares of our Class A common stock granted in connection with the IPO), and the selling stockholder sold 666,667 shares of our Class A common stock to investors in the IPO. · The Company issued 554,299 shares of our Class A common stock to members of our management and certain of our current and former employees upon conversion of the outstanding unit appreciation rights awards held by these individuals (and were deemed to have made a related capital contribution to EVO, LLC in exchange for LLC Interests corresponding to these shares of Class A common stock). Each of these shares of our Class A common stock (and the corresponding LLC Interests) are subject to the same vesting requirements as the related unit appreciation rights awards (without further acceleration as a result of the IPO), except that the Company waived all vesting requirements for performance-based unit appreciation rights awards and performance-based forfeiture requirements applicable to all unit appreciation awards in connection with these Reorganization Transactions. Members of our management and our current and former employees held 63,452 shares of Class A common stock subject to vesting, and 490,847 shares of Class A common stock which was fully vested immediately subsequent to the Reorganization Transactions. Any shares of Class A common stock subject to vesting as described above will be entitled to vote and receive dividends prior to vesting; any dividends received will be paid upon vesting and will be forfeited if the related shares of Class A common stock are forfeited. · The Company issued 48,218 shares of our Class A common stock to certain sellers of Zenith in satisfaction of a portion of a contingent payment obligation in connection with an acquisition of the remaining interest in a joint venture the Company completed in May 2017. · The Company issued 35,913,538 shares of our Class B common stock to Blueapple for nominal consideration on a one-to-one basis with the number of LLC Interests it owned, which will provide for 15.9% of the combined voting power in EVO, Inc. until the earlier of (1) the third anniversary of the consummation of the IPO and (2) the date on which Blueapple no longer beneficially owns LLC Interests in EVO, LLC equal to or greater than 3% of the outstanding economic interest in EVO, LLC. As a result, the Company allocated 53.2% of the member’s deficit and accumulated loss that existed at the time of the reorganization to redeemable non-controlling interests. · The Company issued 2,560,955 shares of our Class C common stock to our executive officers for nominal consideration on a one-to-one basis with the number of LLC Interests they own, which provide holders 3.5 votes per share. The voting rights associated with our Class C common stock are capped so that the aggregate voting power of all shares of Class C common stock outstanding, when taken together with any shares of Class A common stock that are subject to vesting or forfeiture held by employees or directors of the Company, will not exceed 20% of the combined voting power in the Company. Each share of our Class C common stock will be automatically converted into a share of our Class D common stock upon the earliest of (1) the third anniversary of the consummation of the IPO or (2) the date on which the holder’s employment with the Company is terminated. In combination with Class D common stock, 46.8% of the member’s deficit and accumulated loss that existed at the time of the reorganization was allocated to nonredeemable non-controlling interests. · The Company issued 24,305,155 shares of our Class D common stock to MDP and to certain current and former employees for nominal consideration on a one-to-one basis with the number of LLC Interests they own, which will provide one vote per share. In combination with Class C common stock, 46.8% of the member’s deficit and accumulated loss that existed at the time of the reorganization was allocated to nonredeemable non-controlling interests. · The Company granted certain equity awards to our executive officers, directors and certain employees (“IPO Grant”) in connection with the completion of the IPO. These grants consisted of 503,795 restricted stock units and 2,115,625 options to purchase shares of Class A common stock. Refer to Note 16, “Stock Compensation Plans and Share-Based Compensation Awards,” for discussion of the impact of the IPO Grant. · The voting and economic rights associated with our classes of common stock are summarized in the following table: Class of Common Stock Holders Voting rights* Economic rights Class A common stock Public, MDP, Executive Officers, Current and Former Employees and Sellers of Zenith One vote per share Yes Class B common stock Blueapple 15.9% No Class C common stock Executive Officers 3.5 votes per share, subject to aggregate cap No Class D common stock MDP and Current and Former Employees One vote per share No *Subject to certain ownership requirements, on the third anniversary of the consummation of the IPO the voting rights of our Class B common stock will cease and each share of our Class C common stock will automatically convert into a share of our Class D common stock. Shares of our common stock will generally vote together as a single class on all matters submitted to a vote of our shareholders. · The Company used the net proceeds from the sale of Class A common stock to purchase LLC Interests directly from EVO, LLC, at a purchase price per LLC Interest equal to the initial public offering price per share of Class A common stock less underwriting discounts and commissions. · The Company amended and restated the limited liability company agreement of EVO, LLC, to, among other things, (1) appoint EVO, Inc. as the sole managing member of EVO, LLC and (2) provide certain sale and exchange rights to the owners of Class B, C and D common stock immediately following the completion of the IPO (the “Continuing LLC Owners”). · EVO, LLC incurred fees and expenses related to the Reorganization Transactions of $10.3 million. · The Continuing LLC Owners continue to own their LLC Interests and, except for MDP through its ownership of shares of our Class A common stock, have no economic interests in EVO, Inc. despite their ownership of Class B common stock, Class C common stock and Class D common stock, as applicable (where “economic interests” means the right to receive any distributions or dividends, whether in cash or stock, in connection with Class A common stock). · The Company entered into the TRA with the Continuing LLC Owners. Refer to Note 3, “Tax Receivable Agreement,” for further information on the TRA. Organizational structure following our IPO Immediately following the completion of our IPO, EVO, Inc. became a holding company and our principal asset was the LLC Interests purchased from EVO, LLC. As the sole managing member of EVO, LLC, EVO, Inc. operates and controls all of the business and affairs of EVO, LLC and, through EVO, LLC and its subsidiaries, conducts our business. Accordingly, although EVO, Inc. has a minority economic interest in EVO, LLC, the Company has the sole voting interest in, and control the management of, EVO, LLC. Therefore, EVO, Inc. has consolidated the financial results of EVO, LLC and its subsidiaries in our unaudited condensed consolidated financial statements. As a result of and immediately following the Reorganization Transactions and the IPO, including the underwriters’ exercise of their option to purchase additional shares of our Class A common stock granted in connection with the IPO: · EVO, Inc. exercises exclusive control over EVO, LLC as its sole managing member. · The investors collectively owned 92.8% of our outstanding Class A common stock, consisting of 16,100,000 shares of our Class A common stock, representing 26.8% of the combined voting power in the Company. · Blueapple, through its ownership of all of our outstanding Class B common stock, owned 15.9% of the combined voting power in the Company. · Our executive officers collectively owned 0.9% of our outstanding Class A common stock, consisting of 134,707 shares of Class A common stock, and 100% of our Class C common stock, which consisted of 2,560,955 shares of our Class C common stock. Certain of our current and former employees also collectively owned 2.0% of our outstanding Class A common stock, consisting of 306,545 shares of Class A common stock, and 7.6% of our outstanding Class D common stock, consisted of 1,843,677 shares of Class D common stock. Collectively, our executive officers held shares of our common stock which represented 15.2% of the combined voting power in the Company, and our current and former employees held shares of our common stock which represented 3.6% of the combined voting power in the Company. · MDP owned 92.4% of our outstanding Class D common stock, which consisted of 22,461,478 shares of our Class D common stock, and 3.8% of our outstanding Class A common stock, which consisted of 652,500 shares of Class A common stock, which represented 38.4% of the combined voting power in the Company. · EVO, Inc. owned 17,355,899 LLC Interests, which represented 21.6% of the LLC Interests. · Blueapple has a sale right providing that, upon our receipt of a sale notice from Blueapple, the Company will use its commercially reasonable best efforts to pursue a public offering of shares of our Class A common stock and will use the net proceeds therefrom to purchase LLC Interests from Blueapple. Upon our receipt of such a sale notice, the Company may elect, at our option (determined solely by our independent directors (within the meaning of the rules of NASDAQ)) who are disinterested, to cause EVO, LLC to instead redeem the applicable LLC Interests for cash; provided that Blueapple consents to any election by us to cause EVO, LLC to redeem the LLC Interests. · Continuing LLC Owners (other than Blueapple) have an exchange right providing that, upon receipt of an exchange notice from such Continuing LLC Owners, the Company will exchange the applicable LLC Interests from such Continuing LLC Owners for newly issued shares of our Class A common stock on a one-for-one basis pursuant to the Exchange Agreement. Upon our receipt of such an exchange notice, the Company may elect, at our option (determined solely by our independent directors (within the meaning of the rules of NASDAQ)) who are disinterested, to cause EVO, LLC to instead redeem the applicable LLC Interests for cash; provided that such Continuing LLC Owners consents to any election by us to cause EVO, LLC to redeem the LLC Interests. In the event that Continuing LLC Owners do not consent to an election by us to cause EVO, LLC to redeem the LLC Interests, the Company is required to exchange the applicable LLC Interests for newly issued shares of Class A common stock. · If the Company elects to cause EVO, LLC to redeem LLC Interests in lieu of pursuing a public offering or exchanging LLC Interests for newly issued shares of our Class A common stock, the Company will offer the other Continuing LLC Owners the right to have their respective LLC Interests redeemed in an amount up to such person’s pro rata share of the aggregate LLC Interests to be redeemed. The Company will not be required to redeem any LLC Interests from Blueapple or any other Continuing LLC Owners in response to a sale notice from Blueapple if the Company elects to pursue, but is unable to complete, a public offering of shares of our Class A common stock. · Continuing LLC Owners also received certain registration rights pursuant to the Registration Rights Agreement. MDP received customary demand registration rights that require the Company to register shares of Class A common stock held by it, including any Class A common stock received upon our exchange of Class A common stock for its LLC Interests. All Continuing LLC Owners (other than Blueapple) received customary piggyback registration rights, which includes the right to participate on a pro rata basis in any public offering the Company conducts in response to our receipt of a sale notice from Blueapple. In addition, the Company agrees to maintain a registration statement with respect to the issuance of the Class A common stock to be issued in exchange for any outstanding LLC Interests pursuant to any exchange under the Exchange Agreement. Blueapple will also have the right, in connection with any public offering the Company conduct (including any offering conducted as a result of an exercise by MDP of its registration rights), to request that the Company uses its commercially reasonable best efforts to pursue a public offering of shares of our Class A common stock and use the net proceeds therefrom to purchase a pro rata portion of its LLC Interests. Use of Proceeds Upon consummation of the IPO, the total net proceeds of the offering were $231.5 million, including proceeds resulting from the underwriters’ exercise of their option to purchase additional shares of our Class A common stock in connection with the IPO. Of the proceeds, $178.2 million was used to repay the second lien term loans under the Senior Secured Credit Facilities, including principal, interest and prepayment fees and $52.6 million was used to repay a portion of the deferred purchase price under the Sterling acquisition. The remaining $0.6 million of proceeds was used for working capital and general corporate purposes. Other offering costs incurred were approximately $10.3 million and were paid by EVO, LLC on behalf of EVO, Inc., pursuant to the EVO, LLC operating agreement. Secondary offering On September 20, 2018, the Company consummated the Secondary Offering of an aggregate 8,075,558 shares of Class A common stock at a price of $24.50 per share. The Secondary Offering consisted of 7,000,000 shares of Class A common stock offered and sold by the Company, with the net proceeds used to purchase an equivalent number of LLC Interests and shares of Class D common stock (which shares were then canceled) from affiliates of MDP (including through the purchase and exercise of a portion of the call option held by MDCP VI-C), and 22,225 shares of Class A common stock offered and sold by certain individual selling stockholders. The shares of Class A common stock offered and sold by the selling stockholders were issued by the Company pursuant to the rights of these selling stockholders to exchange an equivalent number of LLC Interests and shares of Class D common stock (which shares were then canceled) for shares of Class A common stock. The Company also offered and sold 1,053,333 shares of Class A common stock as part of an option granted to the underwriters to purchase additional shares of Class A common stock in the Secondary Offering (the “Underwriter Option”). The Company did not receive any proceeds from the sale of shares of Class A common stock offered by Company, other than shares sold upon exercise of the Underwriter Option. The Company received net proceeds of $25.0 million from the sale of 1,053,333 shares of Class A common stock sold to the underwriter upon exercise of the Underwriter Option and used these proceeds to purchase an equivalent number of LLC Interests directly from EVO, LLC at a purchase price per LLC Interest equal to the public offering price per share of Class A common stock less underwriting discounts and commissions paid. EVO, LLC utilized the net proceeds from the Secondary Offering to pay down the Senior Secured Credit Facilities first lien revolver and to pay the installment payment on the Senior Secured Credit Facilities first lien term loan which was paid on September 27, 2018. Following the Secondary Offering: · Outstanding Class A common stock consisted of 25,429,606 shares of the Class A common stock, representing 41.4% of the combined voting power in the Company. · Blueapple, through its ownership of all of the outstanding Class B common stock, possessed 15.9% of the combined voting power in the Company. · Our executive officers collectively held 0.7% of the outstanding Class A common stock, consisting of 179,540 shares of Class A common stock, and 100% of the Class C common stock, consisting of 2,560,955 shares of the Class C common stock. Certain of the current and former employees (other than executive officers) also collectively held 1.6% of the outstanding Class A common stock, consisting of 400,308 shares of Class A common stock, and 10.5% of our outstanding Class D common stock, consisting of 1,821,452 shares of Class D common stock. Collectively, the executive officers hold shares of the common stock representing 14.9% of the combined voting power in the Company, and the current and former employees hold shares of the common stock representing 0.7% of the combined voting power in the Company. · MDP held 89.5% of the outstanding Class D common stock, consisting of 15,461,478 shares of the Class D common stock, and 2.6% of the outstanding Class A common stock, consisting of 652,500 shares of Class A common stock, representing 26.2% of the combined voting power in the Company. · EVO, Inc. held 25,370,797 LLC Interests, representing 31.3% of the LLC Interests. |
Stock Compensation Plans and Sh
Stock Compensation Plans and Share-Based Compensation Awards | 9 Months Ended |
Sep. 30, 2018 | |
Stock Compensation Plans and Share-Based Compensation Awards | |
Stock Compensation Plans and Share-Based Compensation Awards | (16) The Company provides share-based compensation awards to its employees under the 2018 Plan, which the Company adopted in conjunction with its IPO. The 2018 Plan became effective on May 22, 2018. A total of 7,792,162 shares of our Class A common stock are reserved for issuance under the 2018 Plan. The following table summarizes share-based compensation expense, and the related income tax benefit recognized for share-based compensation awards: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 (In thousands) Share-based compensation expense $ 1,758 $ — $ 53,893 $ — Income tax benefit $ 68 $ — $ 3,914 $ — For share-based compensation awards, the Company recognized share-based compensation expense of $1.8 million and $53.9 million during the three and nine months ended September 30, 2018. No share-based compensation expense was recognized for the three and nine months ended September 30, 2017. The share-based compensation award plans provide for accelerated vesting under certain conditions. Class D awards The Company modified the Class D awards in connection with the IPO. All vesting conditions, with the exception of the consummation of a liquidity event, were waived as a result of the modification, including performance and service vesting conditions. On the modification date, the Company recorded share-based compensation expense based on the modification date fair value of $16.00 per share. As a result share-based compensation expense of $42.8 million was recognized for the nine months ended September 30, 2018 for the Class D awards, which represented the vesting of all 2,672,666 awarded shares. Prior to the consummation of the IPO, no liquidity event was probable and as such no share-based compensation expense had previously been recognized for these awards. On the modification date there were 15 employees or former employees who held Class D awards. All Class D awards granted and vested have a weighted average grant date fair value of $16.00. Unit appreciation rights/Restricted stock awards The Company assumed the EVO, LLC Unit Appreciation Rights Plan (“UAR Plan”) and issued shares of Class A common stock to members of our management and our current and former employees upon conversion of the outstanding UARs held by these individuals at the consummation of the IPO, resulting in newly issued RSAs. In connection with the assumption of the UAR Plan and issuance of Class A common stock, on the IPO date, the Company recorded share-based compensation expense based on the modification date fair value of $16.00 per share. As a result, share-based compensation expense of $0.3 million and $9.0 million was recognized for the three and nine months ended September 30, 2018 for the RSAs. As of the IPO, 543,323 awarded shares vested and 52,476 of those awards were surrendered for tax obligations. Prior to the consummation of the IPO, no liquidity event was probable and as such no share-based compensation expense had been recognized for these awards. On the modification date, there were 35 employees and former employees who held UARs. Immediately subsequent to the IPO, there were 63,452 unvested RSAs outstanding. During the period subsequent to the IPO, 4,125 awarded shares vested and 518 awards were forfeited. As of September 30, 2018, there are 58,809 unvested awards with unrecognized share-based compensation expense of $0.7 million. All RSAs granted, vested, forfeited, and unvested have a weighted average grant date fair value of $16.00. Restricted stock units The Company recognized share-based compensation expense for RSUs granted of $0.6 million and $0.8 million for the three and nine months ended September 30, 2018. A summary of RSUs activity is as follows (in thousands, except per share data): Number outstanding Weighted average fair value Balance at December 31, 2017 — $ — Granted 522 16.19 Vested — — Forfeited (4) 16.00 Balance at September 30, 2018 518 $ 16.19 As of September 30, 2018, total unrecognized share-based compensation expense related to outstanding RSUs was $7.6 million. Each RSU vests in equal annual vesting installments over a period of four years from the grant date and will settle in Class A common stock. The weighted average period outstanding for unvested RSUs is 3.5 years. Stock options The Company recognized share-based compensation expense for the stock options granted of $0.9 million and $1.3 million for the three and nine months ended September 30, 2018. A summary of stock option activity is as follows (in thousands, except per share data): Number outstanding Weighted average fair value Balance at December 31, 2017 — $ — Granted 2,140 6.84 Exercised — — Forfeited (19) 6.68 Balance at September 30, 2018 2,121 $ 6.84 As of September 30, 2018, total unrecognized share-based compensation expense related to unvested stock options was $13.1 million. The weighted average period outstanding for unvested stock options is 3.6 years. Each stock option vests in equal annual installments over a period of four years from grant date, and stock options expire no later than 10 years from the date of grant. For the purpose of calculating share-based compensation expense, the fair value of the stock option grants was determined through the application of the Black-Scholes model with the following assumptions: Three Months Ended September 30, Nine Months Ended September 30, 2018 2018 Expected life (in years) 7.00 7.00 Weighted average risk-free interest rate 2.89% 3.04% Expected volatility 33.99% 34.28% Dividend yield 0.00% 0.00% Weighted average fair value at grant date $ 9.23 $ 6.84 The risk-free interest rate is based on the yield of a zero coupon U.S. Treasury security with a maturity equal to the expected life of the stock option from the date of the grant. The assumption on expected volatility is based on the historical volatility of a peer group of market participants as the Company has no established historical volatility. It is the Company’s intent to retain all profits for the operations of the business for the foreseeable future, as such the dividend yield assumption is zero. The Company applied the simplified method in determining the expected life of the stock options as the Company has no historical basis upon which to determine historical exercise periods. The Company based the assumptions of the expected term of the options as the expected term plus half of the remaining life through expiration. All stock options exercised will be settled in Class A common stock. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2018 | |
Subsequent Events | |
Subsequent Events | (17) Subsequent events have been evaluated from the balance sheet date through the date in which the unaudited condensed consolidated financial statements were available to be issued. On October 16, 2018, a subsidiary of the Company acquired 100% of the outstanding shares of ClearONE, a leading POS payments platform integrated to over one hundred software solutions serving more than 10,000 merchants across Europe, for €5.4 million ($6.3 million based on the foreign exchange rate at the time of the acquisition). The Company is in the process of evaluating the fair value of acquired assets resulting from the acquisition. |
Description of Business and S_2
Description of Business and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Description of Business and Summary of Significant Accounting Policies | |
Basis of Presentation and Use of Estimates | (b) The accompanying unaudited condensed consolidated balance sheets as of September 30, 2018 , the unaudited condensed consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2018 and 2017, the unaudited condensed consolidated statement of changes in equity for the nine months ended September 30, 2018, and the unaudited condensed consolidated statements of cash flows for the nine months ended September 30, 2018 and 2017 reflect all adjustments that are of a normal, recurring nature and that are considered necessary for a fair presentation of the results for the periods shown in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the applicable rules and regulations of the Securities Exchange Commission (“SEC”) for interim financial reporting periods. Accordingly, certain information and footnote disclosures have been condensed or omitted in accordance with SEC rules that would ordinarily be required under U.S. GAAP for complete financial statements. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s final prospectus filed with the SEC on May 24, 2018 for the offering of Class A common stock (the “Class A common stock”). See Note 15, “Shareholders’ Equity,” to the unaudited condensed consolidated financial statements for information regarding the Reorganization Transactions and the IPO. Effective September 30, 2018, the Company has separately presented settlement lines of credit amounts on the unaudited condensed consolidated balance sheet. These settlement lines of credit were previously presented as a component of the current portion of long-term debt. Prior year amounts have been reclassified to conform to the current period’s presentation. The preparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported assets and liabilities, the disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements, and the reported amounts of revenue and expenses during the period. Accordingly, actual results could differ from those estimates. Estimates are used for accounting purposes including, but not limited to, calculating redeemable non-controlling interests, calculating income taxes, and calculating the valuation of long-lived assets. |
Principles of Consolidation | (c) The accompanying unaudited condensed consolidated financial statements include the accounts of the Company. As sole managing member of EVO, LLC, the Company exerts control over the Group. In accordance with Accounting Standards Codification (“ASC”) 810, Consolidation , EVO, Inc. consolidates the Group’s unaudited condensed consolidated financial statements and records the interests in EVO, LLC that it does not own as non-controlling interests. All intercompany accounts and transactions have been eliminated in consolidation. The Company accounts for investments over which it has significant influence but not a controlling financial interest using the equity method of accounting. |
Cash and Cash Equivalents and Merchant Reserves | (d) Cash and cash equivalents include all cash balances and highly liquid securities with original maturities of three months or less when acquired. Cash balances often exceed federally insured limits; however, concentration of credit risk is limited due to the payment of funds on the day following receipt in satisfaction of the settlement process. Included in cash and cash equivalents are merchant reserve cash balances, which represent funds collected from the Company’s merchants that serve as collateral to minimize contingent liabilities associated with any losses that may occur under the respective merchant agreements (“Merchant Reserves”). While this cash is not restricted in its use, the Company believes that maintaining the Merchant Reserves to collateralize merchant losses strengthens its fiduciary standings with its card network sponsors (“Member Banks”) and is in accordance with the guidelines set by the card networks. As of September 30, 2018, and December 31, 2017, Merchant Reserves were $105.5 million and $111.3 million, respectively. |
Earnings Per Share | (e) Basic earnings per Class A common stock is computed by dividing the net income attributable to EVO, Inc. by the weighted average number of Class A common stock outstanding from May 23, 2018 to September 30, 2018. Diluted earnings per Class A common stock is calculated by dividing the net income attributable to EVO, Inc. by the diluted weighted average Class A common stock outstanding during the period, which includes stock options, restricted stock units (“RSUs”), restricted stock awards (“RSAs”), and common membership interest of EVO, LLC (“LLC Interests”) corresponding to each Class C common share and Class D common share that are convertible into shares of Class A common stock for the period after the closing of the IPO, excluding anti-dilutive securities. The dilutive effect of outstanding share-based compensation awards, if any, is reflected in diluted earnings per Class A common stock by application of the treasury stock method or if-converted method, as applicable. Refer to Note 2, “Earnings Per Share,” for further information. |
Settlement Processing Assets and Liabilities | (f) In certain markets, the Company is a member of various card networks, allowing it to process and fund transactions without third party sponsorship. In other markets, the Company has financial institution sponsors Member Banks for whom the Company facilitates payment transactions. These arrangements allow the Company to route transactions under the Member Banks’ control and identification numbers to clear card transactions through card networks. A summary of these amounts are as follows: September 30, December 31, 2018 2017 (In thousands) Settlement processing assets: Receivable from card networks $ 394,583 $ 342,803 Receivable from merchants 109,446 96,466 Totals $ 504,029 $ 439,269 Settlement processing obligations: Settlement liabilities $ (453,799) $ (372,642) Merchant reserves (105,503) (111,876) Totals $ (559,302) $ (484,518) |
Revenue Recognition | (g) The Company recognizes revenue when (1) it is realized or realizable and earned, (2) there is persuasive evidence of an arrangement, (3) delivery and performance has occurred, (4) there is a fixed or determinable sales price, and (5) collection is reasonably assured. The Company primarily earns revenue from payment processing services. Payment processing service revenue is based on a percentage of transaction value and on specified amounts per transaction or service, and is recognized as such services are performed. The Company also earns revenue from the sale and rental of electronic point-of-sale (“POS”) equipment. Revenue from the sale of these products is recognized when goods are shipped and title passes to the customer. Revenue from the rental of electronic POS equipment is recognized monthly as earned. These revenues are presented in “Processing and other revenue” in the below table and totaled $10.8 million and $9.9 million for the three months ended September 30, 2018 and 2017 , respectively. These revenues totaled $32.1 million and $29.4 million for the nine months ended September 30, 2018 and 2017, respectively. Such rental arrangements are considered multiple element arrangements. The Company follows guidance in ASC 605-25, Revenue Recognition – Multiple-Element Arrangements . However, because the non-processing elements are primarily accounted for as rentals with a similar delivery pattern, the elements have the same revenue recognition timing. Commissions, payable to referral and reseller partners, are recognized as incurred. A summary of revenue is as follows: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 (In thousands) (In thousands) Processing and other revenue $ 488,564 $ 455,851 $ 1,409,569 $ 1,283,223 Interchange and card network fees (282,823) (264,095) (820,328) (746,778) Subtotal 205,741 191,756 589,241 536,445 Commissions (43,345) (40,273) (123,985) (119,083) Card network processing costs and other (17,638) (18,837) (51,325) (51,197) Revenue $ 144,758 $ 132,646 $ 413,931 $ 366,165 |
Share-Based Compensation | (h) The Company accounts for share-based compensation transactions with employees in accordance with ASC 718, Compensation: Stock Compensation . ASC 718 requires a share-based compensation transaction with employees to be measured based on the fair value of the awards issued. The Company granted equity awards prior to the IPO. These awards contained a performance condition contingent on a liquidity event, as well as other metrics. These awards were modified on the IPO date by the compensation committee of the board of directors and the modified awards were fair valued on that date based on the IPO price per share of Class A common stock. The majority of these awards were fully time-vested; the Company recorded compensation expense to fully recognize the life to date value of these awards. With respect to equity awards issued as compensation in connection with the Reorganization Transactions and the IPO pursuant to the 2018 Omnibus Equity Incentive Plan, the fair value of the stock option awards are determined through the application of the Black-Scholes model. The fair value of the RSUs and RSAs was determined based on the IPO per share price or the market price at the time of grant. The fair value of awards granted to employees is expensed based on the vesting conditions of the awards. The Company has elected to recognize forfeitures at the time they occur. Refer to Note 16, “Stock Compensation Plans and Share-Based Compensation Awards,” for further information on the share-based compensation awards. |
Recent Accounting Pronouncements | (i) New accounting pronouncements are issued by the FASB or other standards setting bodies that are adopted by the Company are adopted as of the specified effective date. Unless otherwise discussed, management believes that the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s unaudited condensed consolidated financial statements upon adoption. As the Company is considered an emerging growth company under the JOBS Act adoption of new accounting standards will be consistent with private company effective dates. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement . This update provides clarification and modifies the disclosure requirements on fair value measurement in Topic 820, Fair Value Measurement . The effective date of this update is for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. The Company is evaluating the impact of this ASU on the Company’s unaudited condensed consolidated financial statements. In January 2017, the FASB issued Accounting Standards Update (“ASU”) 2017-04, Intangibles – Goodwill and Other . This update simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. The amendments in this update are effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2021. The Company has early adopted ASU 2017-04 on a prospective basis, effective January 1, 2018. The adoption of this standard did not have a material impact on the Company’s unaudited condensed consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows: Classification of Cash Receipts and Cash Payments . This update addresses eight specific cash flow issues with the objective of reducing the existing diversity in cash flow presentation practices. The amendment is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. The Company has evaluated the impact of this ASU and concluded there is no resulting impact to the presentation on the Company’s unaudited condensed consolidated statement of cash flows. In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting . This update simplifies several aspects of the accounting for share-based payments, including the accounting for excess tax benefits and deficiencies, forfeitures, and statutory tax withholding requirements, as well as classification on the statement of cash flows related to excess tax benefits and employee taxes paid when an employer withholds shares for tax-withholding purposes. The ASU is effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods beginning after December 15, 2018. Early adoption is permitted. An entity that elects early adoption must adopt all of the amendments in the same period. The Company has adopted ASU 2016-09 on a prospective basis effective July 1, 2018. The adoption of this standard did not have an impact on the Company’s unaudited condensed consolidated financial statements. In March, April and May 2016, the FASB issued ASU 2016-08, 2016-10 and 2016-12 , Revenue from Contracts with Customers . These updates clarify certain definitions and topics with respect to ASU 2014-09. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers . This ASU supersedes the revenue recognition requirements in ASC 605, Revenue Recognition . The new standard provides a five-step analysis of transactions to determine when and how revenue is recognized, based upon the core principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new standard also requires additional disclosures regarding the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The new standard, as amended, is effective for the Company for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. Companies are permitted to either apply the requirements retrospectively to all prior periods presented, or apply the requirements in the year of adoption, through a cumulative adjustment. As of the date of this filing, the Company has completed its preliminary assessment of the impacts of the standard and has determined that the amount and timing of revenue recognition for its primary contract category, payment processing services, will remain consistent with the amount and timing of revenue recognition under existing GAAP. Costs to obtain contracts with our customers, which includes certain commissions paid to employees and fulfillment costs, will be capitalized and amortized over the period of benefit under the contract term under the new standard. The Company plans to adopt ASU 2014-09, as well as other clarifications and technical guidance issued by the FASB related to this new revenue standard, on January 1, 2019. The Company expects to apply the modified retrospective transition method, which would result in an adjustment to retained earnings for the cumulative effect, if any, of applying the standard to contracts in effect as of the adoption date. Under this method, the Company will not restate the prior consolidated financial statements presented. Therefore, the new standard will require additional disclosures of the amount by which each financial statement line item has been affected in the current reporting period during 2019, as compared to the guidance that was in effect before adoption with an explanation of the reasons for significant changes, if any. The Company continues to evaluate the disclosure requirements under the new standard in order to determine how disclosures about net revenue and related acquisition costs will be impacted. In July 2018, the FASB issued ASU 2018-10 and 2018-11, Leases . These updates clarify certain definitions and topics with respect to ASU 2016-02. In February 2016, the FASB issued ASU 2016-02, Leases . This standard aims to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The new standard is effective for the Company for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early application of this ASU is permitted for all entities. The Company is evaluating the impact of this ASU on the Company’s unaudited condensed consolidated financial statements. |
Description of Business and S_3
Description of Business and Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Description of Business and Summary of Significant Accounting Policies | |
Summary of settlement processing assets and liabilities | September 30, December 31, 2018 2017 (In thousands) Settlement processing assets: Receivable from card networks $ 394,583 $ 342,803 Receivable from merchants 109,446 96,466 Totals $ 504,029 $ 439,269 Settlement processing obligations: Settlement liabilities $ (453,799) $ (372,642) Merchant reserves (105,503) (111,876) Totals $ (559,302) $ (484,518) |
Summary of revenue | Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 (In thousands) (In thousands) Processing and other revenue $ 488,564 $ 455,851 $ 1,409,569 $ 1,283,223 Interchange and card network fees (282,823) (264,095) (820,328) (746,778) Subtotal 205,741 191,756 589,241 536,445 Commissions (43,345) (40,273) (123,985) (119,083) Card network processing costs and other (17,638) (18,837) (51,325) (51,197) Revenue $ 144,758 $ 132,646 $ 413,931 $ 366,165 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share | |
Schedule of computation of basic and diluted net income per share | Three Months Ended September 30, May 23 - 2018 2018 Numerator: Net income attributable to EVO Payments, Inc. $ (27,389) $ (10,675) Denominator: Weighted average Class A common stock outstanding 18,163,344 17,901,484 Effect of dilutive securities — — Total dilutive securities 18,163,344 17,901,484 Earnings per share: Basic $ (1.51) $ (0.60) Diluted $ (1.51) $ (0.60) Antidilutive securities: Stock options 2,097,054 2,097,054 RSUs 499,510 499,510 Convertible Class C common stock 2,560,955 2,560,955 Convertible Class D common stock 17,282,930 17,282,930 Unit Appreciation Rights 58,809 58,809 |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Sterling Payment Technologies, LLC | |
Acquisitions | |
Schedule of allocation of purchase price | As of the acquisition date (In thousands) Cash and cash equivalents $ 601 Accounts receivable 945 Prepaid expenses and other 905 Inventory 851 Equipment and improvements 2,711 Amortizable intangible assets Trademarks 14,400 Internally developed software 7,300 Non-competition agreements 6,200 Merchant contract portfolios 27,300 Marketing alliance agreements 30,200 Accounts payable and accrued expenses (2,626) Total net fair value excluding goodwill 88,787 Goodwill 107,978 Total purchase price $ 196,765 |
Federated | |
Acquisitions | |
Schedule of allocation of purchase price | Tangible assists acquired $ 1,863 Amortizable intangible assets Trademarks 2,650 Merchant contract portfolios 19,036 Goodwill 23,328 Total assets acquired 46,877 |
Equipment and Improvements (Tab
Equipment and Improvements (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Equipment and Improvements | |
Schedule of equipment and improvements | Estimated Useful Lives in September 30, December 31, Years 2018 2017 (In thousands) Card processing 3-5 $ 117,817 $ 102,789 Office equipment 3-5 41,473 37,476 Computer software 3 47,236 38,669 Leasehold improvements various 16,044 12,764 Furniture and fixtures 5-7 6,160 5,410 Totals 228,730 197,108 Less accumulated depreciation (127,707) (106,889) Foreign currency translation adjustment 908 6,368 Totals $ 101,931 $ 96,587 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets | |
Schedule of intangible assets, net | September 30, December 31, 2018 2017 (In thousands) Intangible assets with finite lives: Merchant contract portfolios: Gross carrying value $ 301,855 $ 274,780 Accumulated amortization (131,545) (113,747) Accumulated impairment losses (5,658) (5,658) Foreign currency translation adjustment (25,212) (26,057) Net 139,440 129,318 Marketing alliance agreements: Gross carrying value 191,924 187,758 Accumulated amortization (44,772) (35,509) Accumulated impairment losses (7,585) (7,585) Foreign currency translation adjustment (14,925) (15,561) Net 124,642 129,103 Trademarks, finite-lived: Gross carrying value 29,931 25,084 Accumulated amortization (10,141) (8,485) Foreign currency translation adjustment (4,270) (3,701) Net 15,520 12,898 Internally developed software: Gross carrying value 56,940 42,442 Accumulated amortization (12,736) (9,760) Accumulated impairment losses (9,324) (9,324) Foreign currency translation adjustment (3,623) (3,247) Net 31,257 20,111 Non-competition agreements: Gross carrying value 6,400 6,200 Accumulated amortization (4,636) (2,633) Net 1,764 3,567 Total finite-lived, net 312,623 294,997 Trademarks, indefinite-lived: Gross carrying value 18,499 18,486 Total intangible assets, net $ 331,122 $ 313,483 |
Schedule of estimated amortization expense | Amount (In thousands) Years ending: 2018 (remainder for the year) $ 16,033 2019 46,772 2020 42,017 2021 37,345 2022 32,390 2023 and thereafter 138,066 Total $ 312,623 |
Schedule of net intangible assets by segment | September 30, December 31, 2018 2017 (In thousands) Intangible assets, net: North America Merchant contract portfolios $ 105,465 $ 89,045 Marketing alliance agreements 80,295 82,604 Trademarks, finite-lived 4,121 — Internally developed software 18,261 10,431 Non-competition agreements 1,764 3,567 Trademarks, indefinite-lived 18,499 18,486 Total 228,405 204,133 Europe Merchant contract portfolios 33,975 40,273 Marketing alliance agreements 44,347 46,499 Trademarks, finite-lived 11,399 12,898 Internally developed software 12,996 9,680 Total 102,717 109,350 Total intangible assets, net $ 331,122 $ 313,483 |
Schedule of goodwill activity | Reportable Segment North America Europe Total (In thousands) Goodwill, gross, as of December 31, 2017 $ 196,126 $ 139,843 $ 335,969 Accumulated impairment losses — (24,291) (24,291) Goodwill, net, as of December 31, 2017 196,126 115,552 311,678 Business combinations 34,294 — 34,294 Foreign currency translation adjustment 1,579 (5,456) (3,877) Goodwill, net as of September 30, 2018 $ 231,999 $ 110,096 $ 342,095 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions | |
Schedule of related party balances | September 30, December 31, 2018 2017 (In thousands) Receivables from sale of POS devices and peripherals $ 1,447 $ 1,609 Receivables from related companies 876 974 Notes receivable, short term 8 42 Due from related parties, short term $ 2,331 $ 2,625 Notes receivable, long term 923 109 Due from related parties, long term $ 923 $ 109 Liabilities to related companies 4,597 7,847 Due to related parties, short term $ 4,597 $ 7,847 ISO commission reserve 385 675 Due to related parties, long term $ 385 $ 675 |
Long-Term Debt and Credit Fac_2
Long-Term Debt and Credit Facilities (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Long-Term Debt and Credit Facilities | |
Summary of long-term debt | September 30, December 31, 2018 2017 (In thousands) First lien term loan $ 656,404 $ 566,075 Second lien term loan — 175,206 First lien revolver 39,212 44,632 Deferred purchase price — 68,720 Letter of credit — 1,000 Less debt issuance costs (13,656) (19,679) Total long-term debt 681,960 835,954 Less current portion of long-term debt (7,416) (75,008) Total long-term debt, net of current portion $ 674,544 $ 760,946 |
Schedule of principal payment requirements | Amounts (In thousands) Years ending December 31: 2018 (remainder of the year) $ 2,461 2019 6,593 2020 6,593 2021 6,593 2022 6,593 2023 and thereafter 666,783 $ 695,616 |
Supplemental Cash Flows Infor_2
Supplemental Cash Flows Information (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Supplemental Cash Flows Information | |
Schedule of supplemental cash flow disclosures and noncash investing and financing activities | 2018 2017 (In thousands) Supplemental disclosure of cash flow data: Interest paid $ 37,819 $ 42,617 Income taxes paid, net of refunds 5,672 8,249 Supplemental disclosure of noncash investing and financing activities: Contingent consideration payable 6,400 3,564 Contingent consideration settled with the issuance of Class A common stock 771 — Deferred purchase price $ — $ 71,200 |
Redeemable Non-controlling In_2
Redeemable Non-controlling Interests (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Redeemable Non-controlling Interests | |
Schedule of components of redeemable non-controlling interest | Pre-IPO Post-IPO May 23, September 30, December 31, 2018 2018 2017 (In thousands) Beginning balance $ 148,266 $ 689,569 $ 100,530 Acquired redeemable non-controlling interests — — — Net income attributable to redeemable non-controlling interests - eService 1,291 2,794 5,465 Net income attributable to redeemable non-controlling interests - Blueapple — (27,853) — Gain (loss) on OCI - eService (2,104) (1,355) 10,662 Gain (loss) on OCI - Blueapple — 544 — Legacy accumulated deficit allocation (150,485) — — Legacy AOCI allocation (39,404) — — Increase (decrease) in the maximum redemption amount of redeemable non-controlling interests - eService — 9,742 34,985 redeemable non-controlling interests - Blueapple 735,775 296,839 — Distributions - eService (3,770) (1,004) (3,376) Ending balance $ 689,569 $ 969,276 $ 148,266 |
Fair Value (Tables)
Fair Value (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value | |
Schedule of information about items which are carried at fair value on a recurring basis | September 30, 2018 (In thousands) Level 1 Level 2 Level 3 Total Cash equivalents $ 103,987 $ — $ — $ 103,987 Contingent consideration — — 8,075 8,075 Redeemable non-controlling interests - Blueapple — — 815,417 815,417 Redeemable non-controlling interests - eService — — 153,859 153,859 Total $ 103,987 $ — $ 977,351 $ 1,081,338 December 31, 2017 (In thousands) Level 1 Level 2 Level 3 Total Cash equivalents $ 110,537 $ — $ — $ 110,537 Contingent consideration — — 3,957 3,957 Redeemable non-controlling interests - Blueapple — — — — Redeemable non-controlling interests - eService — — 148,266 148,266 Total $ 110,537 $ — $ 152,223 $ 262,760 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies | |
Schedule of future minimum annual lease payments | Amount (In thousands) Years ending December 31: 2018 (remainder of year) $ 1,939 2019 7,793 2020 6,894 2021 5,865 2022 4,834 2023 and thereafter 16,842 Total $ 44,167 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Segment Information | |
Summary of segment information | Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 (In thousands) (In thousands) Segment revenue: North America $ 79,487 $ 75,042 $ 232,687 $ 216,956 Europe 65,271 57,604 181,244 149,209 Revenue $ 144,758 $ 132,646 $ 413,931 $ 366,165 Segment profit: North America $ 30,962 $ 21,372 $ 73,616 $ 57,009 Europe 15,985 16,101 42,657 41,495 Total segment profit 46,947 37,473 116,273 98,504 Corporate (8,518) (8,923) (31,879) (19,065) Depreciation and amortization (20,488) (19,806) (61,308) (55,479) Net interest expense (10,076) (15,626) (45,831) (45,565) Provision for income tax expense (32,155) (5,377) (7,974) (14,734) Share-based compensation expense (2,021) — (53,284) — Net loss attributable to EVO Investco, LLC $ (12,259) $ (36,339) Net (loss) income attributable to non-controlling interest of EVO Investco, LLC (1,078) 73,328 Net income attributable to EVO Payments, Inc. $ (27,389) $ (10,675) Capital expenditures: North America $ 7,010 $ 2,944 $ 19,802 $ 8,029 Europe 5,983 7,295 19,161 16,360 Consolidated total capital expenditures $ 12,993 $ 10,239 $ 38,963 $ 24,389 |
Schedule of information on segments and reconciliations to total assets | September 30, December 31, Segment total assets: 2018 2017 North America $ 1,138,628 $ 1,010,859 Europe 553,441 497,439 Total assets $ 1,692,069 $ 1,508,298 |
Shareholder_s Equity (Tables)
Shareholder’s Equity (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Shareholders' Equity | |
Schedule of voting and economic rights of common stockholders | Class of Common Stock Holders Voting rights* Economic rights Class A common stock Public, MDP, Executive Officers, Current and Former Employees and Sellers of Zenith One vote per share Yes Class B common stock Blueapple 15.9% No Class C common stock Executive Officers 3.5 votes per share, subject to aggregate cap No Class D common stock MDP and Current and Former Employees One vote per share No *Subject to certain ownership requirements, on the third anniversary of the consummation of the IPO the voting rights of our Class B common stock will cease and each share of our Class C common stock will automatically convert into a share of our Class D common stock. |
Stock Compensation Plans and _2
Stock Compensation Plans and Share-Based Compensation Awards (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Stock Compensation Plans and Share-Based Compensation Awards | |
Schedule of share based compensation expense and related income tax benefit recognized for share-based compensation awards | Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 (In thousands) Share-based compensation expense $ 1,758 $ — $ 53,893 $ — Income tax benefit $ 68 $ — $ 3,914 $ — |
Summary of RSU activity | A summary of RSUs activity is as follows (in thousands, except per share data): Number outstanding Weighted average fair value Balance at December 31, 2017 — $ — Granted 522 16.19 Vested — — Forfeited (4) 16.00 Balance at September 30, 2018 518 $ 16.19 |
Summary of stock option activity | A summary of stock option activity is as follows (in thousands, except per share data): Number outstanding Weighted average fair value Balance at December 31, 2017 — $ — Granted 2,140 6.84 Exercised — — Forfeited (19) 6.68 Balance at September 30, 2018 2,121 $ 6.84 |
Schedule of assumptions used in estimating the grant date fair values | Three Months Ended September 30, Nine Months Ended September 30, 2018 2018 Expected life (in years) 7.00 7.00 Weighted average risk-free interest rate 2.89% 3.04% Expected volatility 33.99% 34.28% Dividend yield 0.00% 0.00% Weighted average fair value at grant date $ 9.23 $ 6.84 |
Description of Business and S_4
Description of Business and Summary of Significant Accounting Policies - Other (Details) $ in Thousands | Sep. 30, 2018USD ($)item | Sep. 20, 2018shares | May 30, 2018 | Sep. 30, 2018USD ($)segmentitem | Dec. 31, 2017USD ($) |
Minimum number of merchants | item | 550,000 | 550,000 | |||
Number of markets | item | 50 | 50 | |||
Number of reportable segments | segment | 2 | ||||
Merchant reserve cash balances | $ 105,500 | $ 105,500 | $ 111,300 | ||
Settlement processing assets: | |||||
Receivable from card networks | 394,583 | 394,583 | 342,803 | ||
Receivable from merchants | 109,446 | 109,446 | 96,466 | ||
Totals | 504,029 | 504,029 | 439,269 | ||
Settlement processing obligations: | |||||
Settlement liabilities | (453,799) | (453,799) | (372,642) | ||
Merchant reserves | (105,503) | (105,503) | (111,876) | ||
Totals | $ (559,302) | $ (559,302) | $ (484,518) | ||
EVO LLC | |||||
Ownership interest (as a percent) | 31.30% | 31.30% | 21.60% | ||
Class A Common Stock | Secondary Offering | |||||
Number of shares of stock issued | shares | 8,075,558 |
Description of Business and S_5
Description of Business and Summary of Significant Accounting Policies - Revenue Recognition (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenue Recognition | ||||
Revenue from rental of electronic point-of-sale equipment | $ 10,800 | $ 9,900 | $ 32,100 | $ 29,400 |
Summary of revenue | ||||
Processing and other revenue | 488,564 | 455,851 | 1,409,569 | 1,283,223 |
Interchange and card network fees | (282,823) | (264,095) | (820,328) | (746,778) |
Subtotal | 205,741 | 191,756 | 589,241 | 536,445 |
Commissions | (43,345) | (40,273) | (123,985) | (119,083) |
Card network processing costs and other | (17,638) | (18,837) | (51,325) | (51,197) |
Revenue | $ 144,758 | $ 132,646 | $ 413,931 | $ 366,165 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 4 Months Ended | 9 Months Ended |
Sep. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2018 | |
Earnings Per Share | |||
Net income attributable to EVO Payments, Inc | $ (27,389) | $ (10,675) | $ (10,675) |
Weighted average Class A common stock outstanding | 18,163,344 | 17,901,484 | 17,901,484 |
Total dilutive securities | 18,163,344 | 17,901,484 | 17,901,484 |
Basic (in dollars per share) | $ (1.51) | $ (0.60) | $ (0.60) |
Diluted (in dollars per share) | $ (1.51) | $ (0.60) | $ (0.60) |
Stock options | |||
Earnings Per Share | |||
Antidilutive securities | 2,097,054 | 2,097,054 | |
RSUs | |||
Earnings Per Share | |||
Antidilutive securities | 499,510 | 499,510 | |
Class C Common Stock | |||
Earnings Per Share | |||
Antidilutive securities | 2,560,955 | 2,560,955 | |
Class D Common Stock | |||
Earnings Per Share | |||
Antidilutive securities | 17,282,930 | 17,282,930 | |
Unit Appreciation Rights | |||
Earnings Per Share | |||
Antidilutive securities | 58,809 | 58,809 |
Tax Receivable Agreement (Detai
Tax Receivable Agreement (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Tax Receivable Agreement | |
Payment on applicable cash tax savings (as a percent) | 85.00% |
Minimum first payment due after filing of companys tax return | 95 days |
Maximum first payment due after filing of companys tax return | 125 days |
Payments to the Continuing LLC Owners | $ 49.9 |
Deferred tax assets related to exchange of units | 42.4 |
Minimum tax receivable agreement obligation over the agreed period | 0 |
Maximum tax receivable agreement obligation over the agreed period | $ 3.6 |
Period over which the obligations are to be settled | 15 years |
Deferred tax asset recorded in connection with a stock offering | $ 49.9 |
Amount of payment liability pursuant to tax receivable agreements | $ 42.4 |
Acquisitions (Details)
Acquisitions (Details) $ in Thousands, € in Millions | Sep. 28, 2018USD ($) | May 31, 2018USD ($) | Apr. 30, 2018EUR (€) | Apr. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Feb. 28, 2018USD ($) | Sep. 30, 2017USD ($) | May 31, 2017USD ($) | Apr. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Jan. 31, 2017USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2018USD ($) | Dec. 31, 2017USD ($) |
Allocation of purchase price | ||||||||||||||
Goodwill | $ 342,095 | $ 342,095 | $ 311,678 | |||||||||||
Other disclosures: | ||||||||||||||
Book value of the investment | 1,372 | 1,372 | $ 1,379 | |||||||||||
Gain on acquisition of unconsolidated investee | $ 8,659 | $ 8,659 | ||||||||||||
Deferred purchase price | ||||||||||||||
Acquisitions | ||||||||||||||
Interest rate (as a percent) | 5.00% | |||||||||||||
Quarterly principal payments | $ 5,000 | |||||||||||||
Card Processing | Minimum | ||||||||||||||
Acquisitions | ||||||||||||||
Useful life of equipment | 3 years | 3 years | ||||||||||||
Card Processing | Maximum | ||||||||||||||
Acquisitions | ||||||||||||||
Useful life of equipment | 5 years | 5 years | ||||||||||||
Office equipment | Minimum | ||||||||||||||
Acquisitions | ||||||||||||||
Useful life of equipment | 3 years | 3 years | ||||||||||||
Office equipment | Maximum | ||||||||||||||
Acquisitions | ||||||||||||||
Useful life of equipment | 5 years | 5 years | ||||||||||||
Computer software | ||||||||||||||
Acquisitions | ||||||||||||||
Useful life of equipment | 3 years | 3 years | ||||||||||||
EVO Payments International Corp. - Canada | ||||||||||||||
Acquisitions | ||||||||||||||
Percentage of interest acquired | 30.00% | |||||||||||||
Contingent consideration | $ 900 | |||||||||||||
Reduction to members' deficit | 400 | |||||||||||||
Reduction to nonredeemable non-controlling interest | $ 500 | |||||||||||||
Nationwide Payment Solutions, LLC | ||||||||||||||
Acquisitions | ||||||||||||||
Percentage of interest acquired | 38.00% | |||||||||||||
Contingent consideration | $ 3,800 | |||||||||||||
Reduction to members' deficit | 20,100 | |||||||||||||
Reduction to nonredeemable non-controlling interest | 600 | |||||||||||||
Upfront payment | $ 16,900 | |||||||||||||
Liberbank, S.A | ||||||||||||||
Acquisitions | ||||||||||||||
Total consideration transferred | € 7.9 | $ 9,500 | ||||||||||||
Liberbank, S.A | Merchant contract portfolios | ||||||||||||||
Acquisitions | ||||||||||||||
Useful life of intangible assets | 5 years | 5 years | ||||||||||||
Liberbank, S.A | Marketing alliance agreements | ||||||||||||||
Acquisitions | ||||||||||||||
Useful life of intangible assets | 15 years | 15 years | ||||||||||||
Liberbank, S.A | Trademarks | ||||||||||||||
Acquisitions | ||||||||||||||
Useful life of intangible assets | 15 years | 15 years | ||||||||||||
Liberbank, S.A | Card Processing | ||||||||||||||
Acquisitions | ||||||||||||||
Useful life of equipment | 3 years | 3 years | ||||||||||||
Nodus Technologies, Inc | ||||||||||||||
Acquisitions | ||||||||||||||
Percentage of interest acquired | 100.00% | |||||||||||||
Total consideration transferred | $ 18,000 | |||||||||||||
Holdback liability | $ 800 | |||||||||||||
Nodus Technologies, Inc | Merchant contract portfolios | ||||||||||||||
Acquisitions | ||||||||||||||
Useful life of intangible assets | 15 years | |||||||||||||
Nodus Technologies, Inc | Internally developed software | ||||||||||||||
Acquisitions | ||||||||||||||
Useful life of intangible assets | 10 years | |||||||||||||
Nodus Technologies, Inc | Non-competition agreements | ||||||||||||||
Acquisitions | ||||||||||||||
Useful life of intangible assets | 3 years | |||||||||||||
Nodus Technologies, Inc | Trademarks | ||||||||||||||
Acquisitions | ||||||||||||||
Useful life of intangible assets | 20 years | |||||||||||||
Nodus Technologies, Inc | Office equipment | Minimum | ||||||||||||||
Acquisitions | ||||||||||||||
Useful life of equipment | 5 years | |||||||||||||
Nodus Technologies, Inc | Office equipment | Maximum | ||||||||||||||
Acquisitions | ||||||||||||||
Useful life of equipment | 7 years | |||||||||||||
Nodus Technologies, Inc | Computer software | ||||||||||||||
Acquisitions | ||||||||||||||
Useful life of equipment | 3 years | |||||||||||||
Federated | ||||||||||||||
Acquisitions | ||||||||||||||
Total consideration transferred | $ 37,100 | |||||||||||||
Holdback liability | 500 | |||||||||||||
Allocation of purchase price | ||||||||||||||
Tangible assets acquired | 1,863 | |||||||||||||
Amortizable intangible assets | 21,700 | |||||||||||||
Goodwill | 23,328 | |||||||||||||
Total purchase price | 46,877 | |||||||||||||
Other disclosures: | ||||||||||||||
Book value of the investment | 0 | |||||||||||||
Gain on acquisition of unconsolidated investee | $ 8,700 | |||||||||||||
Federated | Merchant contract portfolios | ||||||||||||||
Acquisitions | ||||||||||||||
Useful life of intangible assets | 5 years | |||||||||||||
Allocation of purchase price | ||||||||||||||
Amortizable intangible assets | $ 19,036 | |||||||||||||
Federated | Trademarks | ||||||||||||||
Acquisitions | ||||||||||||||
Useful life of intangible assets | 5 years | |||||||||||||
Allocation of purchase price | ||||||||||||||
Amortizable intangible assets | $ 2,650 | |||||||||||||
Federated US | ||||||||||||||
Acquisitions | ||||||||||||||
Percentage of interest acquired | 67.00% | |||||||||||||
Federated Canada | ||||||||||||||
Acquisitions | ||||||||||||||
Percentage of interest acquired | 100.00% | |||||||||||||
Sterling Payment Technologies, LLC | ||||||||||||||
Acquisitions | ||||||||||||||
Percentage of interest acquired | 100.00% | |||||||||||||
Total consideration transferred | $ 196,800 | |||||||||||||
Estimated deferred purchase price | 71,200 | |||||||||||||
Holdback liability | 200 | |||||||||||||
Estimated working capital adjustment | 300 | |||||||||||||
Acquisition related costs | 1,300 | |||||||||||||
Allocation of purchase price | ||||||||||||||
Cash and cash equivalents | 601 | |||||||||||||
Accounts receivable | 945 | |||||||||||||
Prepaid expenses and other | 905 | |||||||||||||
Inventory | 851 | |||||||||||||
Equipment and improvements | 2,711 | |||||||||||||
Accounts payable and accrued expenses | (2,626) | |||||||||||||
Total net fair value excluding goodwill | 88,787 | |||||||||||||
Goodwill | 107,978 | |||||||||||||
Total purchase price | 196,765 | |||||||||||||
Sterling Payment Technologies, LLC | Deferred purchase price | ||||||||||||||
Acquisitions | ||||||||||||||
Estimated deferred purchase price | 70,000 | |||||||||||||
Sterling Payment Technologies, LLC | Merchant contract portfolios | ||||||||||||||
Allocation of purchase price | ||||||||||||||
Amortizable intangible assets | $ 27,300 | |||||||||||||
Sterling Payment Technologies, LLC | Merchant contract portfolios | Minimum | ||||||||||||||
Acquisitions | ||||||||||||||
Useful life of intangible assets | 12 years | |||||||||||||
Sterling Payment Technologies, LLC | Merchant contract portfolios | Maximum | ||||||||||||||
Acquisitions | ||||||||||||||
Useful life of intangible assets | 18 years | |||||||||||||
Sterling Payment Technologies, LLC | Marketing alliance agreements | ||||||||||||||
Allocation of purchase price | ||||||||||||||
Amortizable intangible assets | $ 30,200 | |||||||||||||
Sterling Payment Technologies, LLC | Marketing alliance agreements | Minimum | ||||||||||||||
Acquisitions | ||||||||||||||
Useful life of intangible assets | 18 years | |||||||||||||
Sterling Payment Technologies, LLC | Marketing alliance agreements | Maximum | ||||||||||||||
Acquisitions | ||||||||||||||
Useful life of intangible assets | 21 years | |||||||||||||
Sterling Payment Technologies, LLC | Internally developed software | ||||||||||||||
Acquisitions | ||||||||||||||
Useful life of intangible assets | 7 years | |||||||||||||
Allocation of purchase price | ||||||||||||||
Amortizable intangible assets | $ 7,300 | |||||||||||||
Sterling Payment Technologies, LLC | Non-competition agreements | ||||||||||||||
Allocation of purchase price | ||||||||||||||
Amortizable intangible assets | $ 6,200 | |||||||||||||
Sterling Payment Technologies, LLC | Non-competition agreements | Minimum | ||||||||||||||
Acquisitions | ||||||||||||||
Useful life of intangible assets | 2 years | |||||||||||||
Sterling Payment Technologies, LLC | Non-competition agreements | Maximum | ||||||||||||||
Acquisitions | ||||||||||||||
Useful life of intangible assets | 4 years | |||||||||||||
Sterling Payment Technologies, LLC | Trademarks | ||||||||||||||
Allocation of purchase price | ||||||||||||||
Amortizable intangible assets | $ 14,400 | |||||||||||||
Vision Payments Solutions, LLC | ||||||||||||||
Acquisitions | ||||||||||||||
Percentage of interest acquired | 25.00% | |||||||||||||
Reduction to members' deficit | $ 400 | |||||||||||||
Reduction to nonredeemable non-controlling interest | $ 400 | |||||||||||||
Pineapple Payments, LLC | ||||||||||||||
Acquisitions | ||||||||||||||
Percentage of interest acquired | 75.00% | |||||||||||||
Contingent consideration | $ 700 | |||||||||||||
Total consideration transferred | $ 8,400 | |||||||||||||
Pineapple Payments, LLC | Merchant contract portfolios | ||||||||||||||
Acquisitions | ||||||||||||||
Useful life of intangible assets | 7 years | |||||||||||||
Pineapple Payments, LLC | Marketing alliance agreements | ||||||||||||||
Acquisitions | ||||||||||||||
Useful life of intangible assets | 5 years | |||||||||||||
Zenith Merchant Services, LLC | ||||||||||||||
Acquisitions | ||||||||||||||
Percentage of interest acquired | 49.00% | |||||||||||||
Contingent consideration | $ 2,800 | |||||||||||||
Reduction to members' deficit | 6,800 | |||||||||||||
Reduction to nonredeemable non-controlling interest | 2,400 | |||||||||||||
Total consideration transferred | $ 9,200 |
Equipment and Improvements (Det
Equipment and Improvements (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Equipment and Improvements | |||||
Equipment and improvements, Gross | $ 228,730 | $ 228,730 | $ 197,108 | ||
Less accumulated depreciation | (127,707) | (127,707) | (106,889) | ||
Foreign currency translation adjustment | 908 | 908 | 6,368 | ||
Total | 101,931 | 101,931 | 96,587 | ||
Depreciation | |||||
Depreciation expense | 9,100 | $ 7,700 | 27,600 | $ 22,000 | |
Decrease in equipment and improvements | 8,500 | 3,400 | |||
Decrease in accumulated depreciation | 7,600 | $ 3,400 | |||
Card Processing | |||||
Equipment and Improvements | |||||
Equipment and improvements, Gross | 117,817 | 117,817 | 102,789 | ||
Office equipment | |||||
Equipment and Improvements | |||||
Equipment and improvements, Gross | 41,473 | 41,473 | 37,476 | ||
Computer software | |||||
Equipment and Improvements | |||||
Equipment and improvements, Gross | 47,236 | $ 47,236 | $ 38,669 | ||
Estimated useful lives | 3 years | 3 years | |||
Leasehold improvements | |||||
Equipment and Improvements | |||||
Equipment and improvements, Gross | 16,044 | $ 16,044 | $ 12,764 | ||
Furniture and fixtures | |||||
Equipment and Improvements | |||||
Equipment and improvements, Gross | $ 6,160 | $ 6,160 | $ 5,410 | ||
Minimum | Card Processing | |||||
Equipment and Improvements | |||||
Estimated useful lives | 3 years | 3 years | |||
Minimum | Office equipment | |||||
Equipment and Improvements | |||||
Estimated useful lives | 3 years | 3 years | |||
Minimum | Furniture and fixtures | |||||
Equipment and Improvements | |||||
Estimated useful lives | 5 years | 5 years | |||
Maximum | Card Processing | |||||
Equipment and Improvements | |||||
Estimated useful lives | 5 years | 5 years | |||
Maximum | Office equipment | |||||
Equipment and Improvements | |||||
Estimated useful lives | 5 years | 5 years | |||
Maximum | Furniture and fixtures | |||||
Equipment and Improvements | |||||
Estimated useful lives | 7 years | 7 years |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Intangible assets, net (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Intangible assets with finite lives: | |||||
Net | $ 312,623 | $ 312,623 | $ 294,997 | ||
Total intangible assets, net | 331,122 | 331,122 | 313,483 | ||
Amortization expense related to intangible assets | 11,500 | $ 12,100 | 33,700 | $ 33,400 | |
Trademarks | |||||
Intangible assets with finite lives: | |||||
Gross carrying value | 18,499 | 18,499 | 18,486 | ||
Merchant contract portfolios | |||||
Intangible assets with finite lives: | |||||
Gross carrying value | 301,855 | 301,855 | 274,780 | ||
Accumulated amortization | (131,545) | (131,545) | (113,747) | ||
Accumulated impairment losses | (5,658) | (5,658) | (5,658) | ||
Foreign currency translation adjustment | (25,212) | (25,212) | (26,057) | ||
Net | 139,440 | 139,440 | 129,318 | ||
Marketing alliance agreements | |||||
Intangible assets with finite lives: | |||||
Gross carrying value | 191,924 | 191,924 | 187,758 | ||
Accumulated amortization | (44,772) | (44,772) | (35,509) | ||
Accumulated impairment losses | (7,585) | (7,585) | (7,585) | ||
Foreign currency translation adjustment | (14,925) | (14,925) | (15,561) | ||
Net | 124,642 | 124,642 | 129,103 | ||
Trademarks | |||||
Intangible assets with finite lives: | |||||
Gross carrying value | 29,931 | 29,931 | 25,084 | ||
Accumulated amortization | (10,141) | (10,141) | (8,485) | ||
Foreign currency translation adjustment | (4,270) | (4,270) | (3,701) | ||
Net | 15,520 | 15,520 | 12,898 | ||
Internally developed software | |||||
Intangible assets with finite lives: | |||||
Gross carrying value | 56,940 | 56,940 | 42,442 | ||
Accumulated amortization | (12,736) | (12,736) | (9,760) | ||
Accumulated impairment losses | (9,324) | (9,324) | (9,324) | ||
Foreign currency translation adjustment | (3,623) | (3,623) | (3,247) | ||
Net | 31,257 | 31,257 | 20,111 | ||
Non-competition agreements | |||||
Intangible assets with finite lives: | |||||
Gross carrying value | 6,400 | 6,400 | 6,200 | ||
Accumulated amortization | (4,636) | (4,636) | (2,633) | ||
Net | $ 1,764 | $ 1,764 | $ 3,567 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Estimated amortization expense (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Estimated amortization expense | ||
2018 (remainder for the year) | $ 16,033 | |
2,019 | 46,772 | |
2,020 | 42,017 | |
2,021 | 37,345 | |
2,022 | 32,390 | |
2023 and thereafter | 138,066 | |
Total | $ 312,623 | $ 294,997 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Net intangible assets by segment (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Intangible assets, net | ||
Total intangible assets, net | $ 331,122 | $ 313,483 |
North America | ||
Intangible assets, net | ||
Total intangible assets, net | 228,405 | 204,133 |
North America | Trademarks | ||
Intangible assets, net | ||
Total intangible assets, net | 18,499 | 18,486 |
North America | Merchant contract portfolios | ||
Intangible assets, net | ||
Total intangible assets, net | 105,465 | 89,045 |
North America | Marketing alliance agreements | ||
Intangible assets, net | ||
Total intangible assets, net | 80,295 | 82,604 |
North America | Trademarks | ||
Intangible assets, net | ||
Total intangible assets, net | 4,121 | |
North America | Internally developed software | ||
Intangible assets, net | ||
Total intangible assets, net | 18,261 | 10,431 |
North America | Non-competition agreements | ||
Intangible assets, net | ||
Total intangible assets, net | 1,764 | 3,567 |
Europe | ||
Intangible assets, net | ||
Total intangible assets, net | 102,717 | 109,350 |
Europe | Merchant contract portfolios | ||
Intangible assets, net | ||
Total intangible assets, net | 33,975 | 40,273 |
Europe | Marketing alliance agreements | ||
Intangible assets, net | ||
Total intangible assets, net | 44,347 | 46,499 |
Europe | Trademarks | ||
Intangible assets, net | ||
Total intangible assets, net | 11,399 | 12,898 |
Europe | Internally developed software | ||
Intangible assets, net | ||
Total intangible assets, net | $ 12,996 | $ 9,680 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Goodwill activity (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Goodwill, Roll forward | |||
Goodwill, gross, at the beginning of the year | $ 335,969 | ||
Accumulated impairment losses | (24,291) | ||
Goodwill, net, at the beginning of the year | $ 311,678 | ||
Business combinations | 34,294 | ||
Foreign currency translation adjustment | (3,877) | ||
Goodwill, net, at the end of the year | 342,095 | ||
Goodwill | |||
Goodwill impairment | 0 | $ 0 | |
Long-lived asset impairment | 0 | $ 0 | |
North America | |||
Goodwill, Roll forward | |||
Goodwill, gross, at the beginning of the year | 196,126 | ||
Goodwill, net, at the beginning of the year | 196,126 | ||
Business combinations | 34,294 | ||
Foreign currency translation adjustment | 1,579 | ||
Goodwill, net, at the end of the year | 231,999 | ||
Europe | |||
Goodwill, Roll forward | |||
Goodwill, gross, at the beginning of the year | 139,843 | ||
Accumulated impairment losses | $ (24,291) | ||
Goodwill, net, at the beginning of the year | 115,552 | ||
Foreign currency translation adjustment | (5,456) | ||
Goodwill, net, at the end of the year | $ 110,096 |
Related Party Transactions - Re
Related Party Transactions - Related party balances (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Related party balances: | |||||
Receivables from sale of POS devices and peripherals | $ 1,447 | $ 1,447 | $ 1,609 | ||
Receivables from related companies | 876 | 876 | 974 | ||
Note receivable, short term | 8 | 8 | 42 | ||
Due from related parties, short term | 2,331 | 2,331 | 2,625 | ||
Note receivable, long term | 923 | 923 | 109 | ||
Due from related parties, long term | 923 | 923 | 109 | ||
Liabilities to related companies | 4,597 | 4,597 | 7,847 | ||
Due to related parties, short term | 4,597 | 4,597 | 7,847 | ||
ISO commission reserve | 385 | 385 | 675 | ||
Due to related parties, long term | 385 | 385 | $ 675 | ||
Commission Expense | |||||
Related Party Transactions | |||||
Expenses with related parties | 4,300 | $ 9,800 | 13,800 | $ 30,600 | |
Sale of Equipment and Services | |||||
Related Party Transactions | |||||
Revenue from related parties | $ 100 | $ 200 | $ 400 | ||
Sale of Equipment and Services | Maximum | |||||
Related Party Transactions | |||||
Revenue from related parties | $ 100 |
Related Party Transactions - Tr
Related Party Transactions - Transactions (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)subsidiary | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) | |
Related Party Transactions | |||||
Receivables from related companies | $ 876 | $ 876 | $ 974 | ||
Members of EVO, LLC | |||||
Related Party Transactions | |||||
Receivables from related companies | 600 | 600 | 800 | ||
Minority held affiliates | |||||
Related Party Transactions | |||||
Receivables from related companies | 700 | 700 | $ 300 | ||
Certain employees | |||||
Related Party Transactions | |||||
Loans issued for paying withholding taxes | 900 | 900 | |||
NFP | |||||
Related Party Transactions | |||||
Payment of fees | 100 | $ 200 | |||
NFP | Maximum | |||||
Related Party Transactions | |||||
Payment of fees | 100 | $ 100 | |||
Consulting services | MDP | Maximum | |||||
Related Party Transactions | |||||
Payment of fees | 100 | 100 | 100 | 5,700 | |
Treasury, Payroll, Tax Preparation and Other Services | Blueapple | |||||
Related Party Transactions | |||||
Expenses with related parties | 100 | 100 | 200 | ||
Treasury, Payroll, Tax Preparation and Other Services | Blueapple | Maximum | |||||
Related Party Transactions | |||||
Expenses with related parties | $ 100 | ||||
Satisfaction of Obligation to Pay Commissions | Blueapple | |||||
Related Party Transactions | |||||
Expenses with related parties | $ 2,400 | ||||
Card-based processing services | Unrelated Third Party | |||||
Related Party Transactions | |||||
Ownership interest (as a percent) | 0.33% | 0.33% | |||
Card-based processing services | Federated US | |||||
Related Party Transactions | |||||
Revenue from related parties | $ 100 | 100 | $ 400 | 400 | |
Ownership interest (as a percent) | 0.33% | 0.33% | |||
Marketing services | Federated Canada | |||||
Related Party Transactions | |||||
Payment of fees | $ 1,900 | 2,300 | $ 5,800 | 6,400 | |
Ownership interest (as a percent) | 0.33% | 0.33% | |||
515 Broadhollow, LLC | |||||
Related Party Transactions | |||||
Monthly lease payment for office space in a related party transaction | $ 100 | ||||
Marketing services and equipment in exchange | Relative of Chairman | |||||
Related Party Transactions | |||||
Payment of fees | $ 100 | $ 100 | $ 400 | $ 200 | |
Number of wholly owned subsidiaries | subsidiary | 1 | ||||
Number of minority owned subsidiaries | subsidiary | 1 |
Income Taxes (Details)
Income Taxes (Details) | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 |
Income Taxes | ||||||
Effective income tax rate (as a percent) | 388.50% | (114.00%) | (11.10%) | (88.80%) | ||
Period of cumulative loss | 12 months | |||||
U.S. federal corporate tax rate (as a percent) | 21.00% | 35.00% | ||||
NOL carryforward deduction, as percentage of taxable income | 80 | 80 | 80 |
Long-Term Debt and Credit Fac_3
Long-Term Debt and Credit Facilities - Credit Facility (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Jun. 14, 2018 | May 25, 2018 | May 31, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Apr. 03, 2018 | Dec. 31, 2017 | Oct. 24, 2017 | Dec. 22, 2016 |
Long-term debt | ||||||||||||
Amount of deferred finance cost recognized | $ 13,656 | $ 13,656 | $ 19,679 | |||||||||
Repayment of debt | $ 743,342 | $ 645,478 | ||||||||||
Deferred purchase price | ||||||||||||
Long-term debt | ||||||||||||
Repayment of debt | $ 57,400 | |||||||||||
Total debt amount | $ 70,000 | $ 70,000 | ||||||||||
Interest rate (as a percent) | 5.00% | 5.00% | ||||||||||
Quarterly principal payments | $ 5,000 | |||||||||||
Proceeds from the IPO and funds drawn from the revolving credit facility | $ 4,800 | |||||||||||
Senior Secured Credit Facilities | Credit Facility | ||||||||||||
Long-term debt | ||||||||||||
Effective interest rate (as a percent) | 7.00% | 7.00% | ||||||||||
First lien senior secured credit facility | ||||||||||||
Long-term debt | ||||||||||||
Maximum borrowing capacity | $ 670,000 | |||||||||||
Quarterly principal payments | $ 1,600 | |||||||||||
First lien senior secured credit facility | Credit Facility | ||||||||||||
Long-term debt | ||||||||||||
Maximum borrowing capacity | $ 135,000 | 100,000 | ||||||||||
Amount of deferred finance cost recognized | $ 1,200 | |||||||||||
Increase in face amount | 65,000 | |||||||||||
Total debt amount | $ 200,000 | |||||||||||
First lien senior secured credit facility | Term loan | ||||||||||||
Long-term debt | ||||||||||||
Additional borrowing capacity | $ 95,000 | |||||||||||
Maximum borrowing capacity | 665,000 | 570,000 | ||||||||||
Amount of deferred finance cost recognized | $ 900 | |||||||||||
Effective interest rate (as a percent) | 5.49% | 5.49% | ||||||||||
Second lien senior secured credit facility | Term loan | ||||||||||||
Long-term debt | ||||||||||||
Maximum borrowing capacity | $ 175,000 | |||||||||||
Repayment of debt | $ 178,200 | $ 178,200 | ||||||||||
Accrued interest paid | 1,500 | |||||||||||
Prepayment penalty | $ 1,800 |
Long-Term Debt and Credit Fac_4
Long-Term Debt and Credit Facilities - Summary (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Jun. 14, 2018 | Apr. 03, 2018 | Dec. 31, 2017 |
Long-term debt | ||||
Long term debt gross | $ 695,616 | |||
Less debt issuance costs | (13,656) | $ (19,679) | ||
Total long-term debt | 681,960 | 835,954 | ||
Less current portion of long-term debt | (7,416) | (75,008) | ||
Total long-term debt, long-term portion | 674,544 | 760,946 | ||
Deferred purchase price | ||||
Long-term debt | ||||
Long term debt gross | 68,720 | |||
Letter of credit | ||||
Long-term debt | ||||
Long term debt gross | 1,000 | |||
First lien senior secured credit facility | Term loan | ||||
Long-term debt | ||||
Long term debt gross | 656,404 | 566,075 | ||
Less debt issuance costs | $ (900) | |||
First lien senior secured credit facility | Credit Facility | ||||
Long-term debt | ||||
Long term debt gross | $ 39,212 | 44,632 | ||
Less debt issuance costs | $ (1,200) | |||
Second lien senior secured credit facility | Term loan | ||||
Long-term debt | ||||
Long term debt gross | $ 175,206 |
Long-Term Debt and Credit Fac_5
Long-Term Debt and Credit Facilities - Principal payment requirements (Details) $ in Thousands | Sep. 30, 2018USD ($) |
Principal payment requirements: | |
2018 (remainder of the year) | $ 2,461 |
2,019 | 6,593 |
2,020 | 6,593 |
2,021 | 6,593 |
2,022 | 6,593 |
2023 and thereafter | 666,783 |
Total | $ 695,616 |
Long-Term Debt and Credit Fac_6
Long-Term Debt and Credit Facilities - Settlement Lines of Credit (Details) Kč in Millions, $ in Millions | Sep. 06, 2018CZK (Kč) | Dec. 19, 2017USD ($) | Dec. 01, 2017USD ($) | Sep. 30, 2018USD ($) | May 29, 2018USD ($) | Dec. 31, 2017USD ($) |
Credit Facility | Deutsche Bank A.G. | ||||||
Long-term debt | ||||||
Maximum borrowing capacity | $ 35 | |||||
Effective interest rate (as a percent) | 6.75% | |||||
Borrowing capacity under the credit facility expressed as a percentage of eligible settlement receivables due | 90.00% | |||||
Loan amounts drawn under the facility | $ 14.4 | $ 12.6 | ||||
Credit Facility | Wells Fargo Bank N.A. | ||||||
Long-term debt | ||||||
Maximum borrowing capacity | $ 10 | $ 15 | ||||
Effective interest rate (as a percent) | 6.25% | |||||
Loan amounts drawn under the facility | $ 11.2 | $ 9.9 | ||||
Credit Facility | Prime rate | Deutsche Bank A.G. | ||||||
Long-term debt | ||||||
Basis spread on variable rate (as a percent) | 1.50% | |||||
Credit Facility | Prime rate | Wells Fargo Bank N.A. | ||||||
Long-term debt | ||||||
Basis spread on variable rate (as a percent) | 1.00% | |||||
Overdraft facility | PKO Bank | ||||||
Long-term debt | ||||||
Maximum borrowing capacity | Kč | Kč 100 | |||||
Effective interest rate (as a percent) | 2.87% | |||||
Loan amounts drawn under the facility | $ 0.1 | |||||
Overdraft facility | Prague Interbank Offered Rate | PKO Bank | ||||||
Long-term debt | ||||||
Basis spread on variable rate (as a percent) | 1.50% |
Supplemental Cash Flows Infor_3
Supplemental Cash Flows Information (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Supplemental disclosure of cash flow data: | ||
Interest paid | $ 37,819 | $ 42,617 |
Income taxes paid, net of refunds | 5,672 | 8,249 |
Supplemental disclosure of noncash investing and financing activities: | ||
Contingent consideration payable | 6,400 | 3,564 |
Contingent consideration settled with the issuance of Class A common stock | $ 771 | |
Deferred purchase price | $ 71,200 |
Redeemable Non-controlling In_3
Redeemable Non-controlling Interests (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 20, 2018 | May 30, 2018 | Sep. 30, 2018 | May 24, 2018 | Sep. 30, 2017 |
Redeemable Non-controlling Interests | ||||||
Beginning balance | $ 689,569 | $ 148,266 | $ 100,530 | |||
Legacy accumulated deficit allocation | (150,485) | |||||
Legacy AOCI allocation | (39,404) | |||||
Ending balance | $ 969,276 | $ 969,276 | 689,569 | 148,266 | ||
eService | ||||||
Redeemable Non-controlling Interests | ||||||
Ownership interest (as a percent) | 66.00% | 66.00% | ||||
Beginning balance | 128,500 | |||||
Net income attributable to redeemable non-controlling interest | $ 2,794 | 1,291 | 5,465 | |||
Gain (loss) on OCI | (1,355) | (2,104) | 10,662 | |||
Increase (decrease) in the maximum redemption amount of eService redeemable non-controlling interest | 9,742 | 34,985 | ||||
Distributions | (1,004) | (3,770) | $ (3,376) | |||
Ending balance | $ 153,900 | $ 153,900 | ||||
eService | PKO Bank Polski | ||||||
Redeemable Non-controlling Interests | ||||||
Ownership interest of noncontrolling owners (as a percent) | 14.00% | 14.00% | ||||
EVO LLC | ||||||
Redeemable Non-controlling Interests | ||||||
Ownership interest (as a percent) | 31.30% | 31.30% | 21.60% | |||
Blueapple | ||||||
Redeemable Non-controlling Interests | ||||||
Beginning balance | 0 | |||||
Net income attributable to redeemable non-controlling interest | $ (27,853) | |||||
Gain (loss) on OCI | 544 | |||||
Increase (decrease) in the maximum redemption amount of eService redeemable non-controlling interest | 296,839 | $ 735,775 | ||||
Ending balance | $ 815,400 | $ 815,400 |
Redeemable Non-controlling In_4
Redeemable Non-controlling Interests - Balances (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | May 24, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 |
Redeemable Non-controlling Interests | |||||
RNCI | $ 969,276 | $ 689,569 | $ 148,266 | $ 148,266 | $ 100,530 |
eService | |||||
Redeemable Non-controlling Interests | |||||
RNCI | 153,900 | 128,500 | |||
Blueapple | |||||
Redeemable Non-controlling Interests | |||||
RNCI | $ 815,400 | $ 0 |
Fair Value - Summary (Details)
Fair Value - Summary (Details) - Recurring - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Fair Value | ||
Cash equivalents | $ 103,987 | $ 110,537 |
Contingent consideration | 8,075 | 3,957 |
Total | 1,081,338 | 262,760 |
Blueapple | ||
Fair Value | ||
Redeemable non-controlling interest | 815,417 | |
eService | ||
Fair Value | ||
Redeemable non-controlling interest | 153,859 | 148,266 |
Level 1 | ||
Fair Value | ||
Cash equivalents | 103,987 | 110,537 |
Total | 103,987 | 110,537 |
Level 3 | ||
Fair Value | ||
Contingent consideration | 8,075 | 3,957 |
Total | 977,351 | 152,223 |
Level 3 | Blueapple | ||
Fair Value | ||
Redeemable non-controlling interest | 815,417 | |
Level 3 | eService | ||
Fair Value | ||
Redeemable non-controlling interest | $ 153,859 | $ 148,266 |
Fair Value - Inputs (Details)
Fair Value - Inputs (Details) $ in Millions | 4 Months Ended | 9 Months Ended |
Sep. 30, 2018USD ($) | Sep. 30, 2018USD ($) | |
Fair Value | ||
Estimated fair value of Visa preferred shares | $ 28.4 | $ 28.4 |
Maximum | Growth Rate | ||
Fair Value | ||
Redeemable non-controlling interest, measurement input (as a percent) | 25.60% | |
eService | Weighted Average Cost of Capital | ||
Fair Value | ||
Redeemable non-controlling interest, measurement input (as a percent) | 17.50% | |
eService | Minimum | Growth Rate | ||
Fair Value | ||
Redeemable non-controlling interest, measurement input (as a percent) | 3.00% | |
Blueapple | Discount for lack of marketability | ||
Fair Value | ||
Redeemable non-controlling interest, measurement input (as a percent) | 5.00% | |
Put option exercise period | 6 months |
Commitments and Contingencies_2
Commitments and Contingencies (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Minimum annual lease payments | ||||
2018 (remainder of year) | $ 1,939 | $ 1,939 | ||
2,019 | 7,793 | 7,793 | ||
2,020 | 6,894 | 6,894 | ||
2,021 | 5,865 | 5,865 | ||
2,022 | 4,834 | 4,834 | ||
2023 and thereafter | 16,842 | 16,842 | ||
Total | 44,167 | 44,167 | ||
Rent expense | $ 3,800 | $ 3,300 | $ 11,200 | $ 9,500 |
Segment Information - Informati
Segment Information - Information on segments & reconciliations (Details) - USD ($) $ in Thousands | 3 Months Ended | 4 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Segment Information | ||||||
Revenue | $ 144,758 | $ 132,646 | $ 413,931 | $ 366,165 | ||
Segment profit | 8,277 | (4,717) | (71,595) | (16,586) | ||
Depreciation and amortization | (20,488) | (19,806) | (61,308) | (55,479) | ||
Net interest expense | (10,076) | (15,626) | (45,831) | (45,565) | ||
Income tax benefit (expense) | (32,155) | (5,377) | (7,974) | (14,734) | ||
Share-based compensation | (2,021) | (53,284) | ||||
Net Loss | (23,878) | (10,094) | (79,569) | (31,320) | ||
Less: Net (loss) income attributable to non-controlling interests of EVO Investco, LLC | (1,078) | 73,328 | ||||
Net income attributable to EVO Payments, Inc. | (27,389) | $ (10,675) | (10,675) | |||
Capital expenditures | 12,993 | 10,239 | 38,963 | 24,389 | ||
Total assets | 1,692,069 | 1,692,069 | 1,692,069 | $ 1,508,298 | ||
Operating | ||||||
Segment Information | ||||||
Segment profit | 46,947 | 37,473 | 116,273 | 98,504 | ||
Corporate | ||||||
Segment Information | ||||||
Segment profit | (8,518) | (8,923) | (31,879) | (19,065) | ||
North America | ||||||
Segment Information | ||||||
Revenue | 79,487 | 75,042 | 232,687 | 216,956 | ||
Capital expenditures | 7,010 | 2,944 | 19,802 | 8,029 | ||
Total assets | 1,138,628 | 1,138,628 | 1,138,628 | 1,010,859 | ||
North America | Operating | ||||||
Segment Information | ||||||
Segment profit | 30,962 | 21,372 | 73,616 | 57,009 | ||
Europe | ||||||
Segment Information | ||||||
Revenue | 65,271 | 57,604 | 181,244 | 149,209 | ||
Capital expenditures | 5,983 | 7,295 | 19,161 | 16,360 | ||
Total assets | 553,441 | $ 553,441 | 553,441 | $ 497,439 | ||
Europe | Operating | ||||||
Segment Information | ||||||
Segment profit | $ 15,985 | $ 16,101 | $ 42,657 | $ 41,495 |
Segment Information - Revenue f
Segment Information - Revenue from external customers (Detail) - Sales Revenue - Geographic Concentration Risk | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
United States | ||||
Revenue from external customers | ||||
Revenue from external customers as a percentage of total revenue | 37.10% | 37.00% | 35.70% | 39.40% |
Poland | ||||
Revenue from external customers | ||||
Revenue from external customers as a percentage of total revenue | 24.10% | 19.50% | 24.20% | 21.40% |
Mexico | ||||
Revenue from external customers | ||||
Revenue from external customers as a percentage of total revenue | 19.00% | 22.80% | 19.90% | 19.80% |
Shareholder's Equity - Prior to
Shareholder's Equity - Prior to Reorganization (Details) - EVO LLC | May 22, 2018shares |
Current and Former Management and Employees | Vested Unit Appreciation Awards | |
Shareholder's Equity | |
Number of awards owned | 297,121 |
Current and Former Management and Employees | Class C and Class D | |
Shareholder's Equity | |
Economic interest in held in LLC prior to reorganization (as a percent) | 6.90% |
Current and Former Management and Employees | Class C Units | |
Shareholder's Equity | |
Number of units held in LLC prior to reorganization | 374,559 |
Current and Former Management and Employees | Class D Units | |
Shareholder's Equity | |
Number of units held in LLC prior to reorganization | 1,106,528 |
Blueapple | Class A Units | |
Shareholder's Equity | |
Number of units held in LLC prior to reorganization | 6,374,245 |
Economic interest in held in LLC prior to reorganization (as a percent) | 54.00% |
MDP | Class B Units | |
Shareholder's Equity | |
Number of units held in LLC prior to reorganization | 3,506,087 |
Economic interest in held in LLC prior to reorganization (as a percent) | 29.70% |
Blueapple and MDP | Current and Former Management and Employees | Class E Units | |
Shareholder's Equity | |
Number of units held in LLC prior to reorganization | 1,011,931 |
Economic interest in held in LLC prior to reorganization (as a percent) | 8.60% |
Shareholder's Equity - Reorgani
Shareholder's Equity - Reorganization (Details) $ / shares in Units, $ in Millions | Sep. 20, 2018$ / sharesshares | May 30, 2018shares | May 23, 2018USD ($)Voteshares | May 22, 2018$ / sharesshares |
Shareholders' Equity | ||||
Reorganization Transactions fees and expenses | $ | $ 10.3 | |||
IPO | ||||
Shareholders' Equity | ||||
Share price | $ / shares | $ 16 | |||
Class A Common Stock | ||||
Shareholders' Equity | ||||
Number of shares issued by the selling stockholder | 666,667 | |||
Number of votes per share | Vote | 1 | |||
Class A Common Stock | IPO | ||||
Shareholders' Equity | ||||
Number of shares of stock issued | 15,433,333 | |||
Class A Common Stock | Underwriters option to purchase | ||||
Shareholders' Equity | ||||
Number of shares of stock issued | 2,100,000 | |||
Class A Common Stock | Secondary Offering | ||||
Shareholders' Equity | ||||
Share price | $ / shares | $ 24.50 | |||
Number of shares of stock issued | 8,075,558 | |||
Number of common shares held in Company | 25,429,606 | |||
Percentage of combined voting power | 41.40% | |||
Class A Common Stock | Secondary Public Offering | ||||
Shareholders' Equity | ||||
Number of shares of stock issued | 7,000,000 | |||
Class A Common Stock | Secondary Offering Selling Stockholder | ||||
Shareholders' Equity | ||||
Number of shares of stock issued | 22,225 | |||
Class A Common Stock | Secondary Offering Overallotment | ||||
Shareholders' Equity | ||||
Number of shares of stock issued | 1,053,333 | |||
Current and Former Management and Employees | Class A Common Stock | ||||
Shareholders' Equity | ||||
Number of common shares issued upon conversion of outstanding unit appreciation awards | 554,299 | |||
Current and Former Management and Employees | Common Class A, Subject to Vesting | ||||
Shareholders' Equity | ||||
Number of common shares held in Company | 63,452 | |||
Current and Former Management and Employees | Common Class A, Vested | ||||
Shareholders' Equity | ||||
Number of common shares held in Company | 490,847 | |||
Executive Officers | ||||
Shareholders' Equity | ||||
Percentage of combined voting power | 15.20% | |||
Number of restricted stock units that comprise the IPO Grants | 503,795 | |||
Executive Officers | Maximum | ||||
Shareholders' Equity | ||||
Percentage of combined voting power | 20.00% | |||
Executive Officers | Secondary Offering | ||||
Shareholders' Equity | ||||
Percentage of combined voting power | 14.90% | |||
Executive Officers | Class A Common Stock | ||||
Shareholders' Equity | ||||
Number of common shares held in Company | 134,707 | |||
Number of stock options to purchase shares of Class A common stock that comprise the IPO Grants | 2,115,625 | |||
Executive Officers | Class A Common Stock | Secondary Offering | ||||
Shareholders' Equity | ||||
Number of common shares held in Company | 179,540 | |||
Percentage of combined voting power | 0.70% | |||
Executive Officers | Class C Common Stock | ||||
Shareholders' Equity | ||||
Number of common shares held in Company | 2,560,955 | |||
Number of shares issued during the period under conversion rights | 2,560,955 | |||
Number of votes per share | Vote | 3.5 | |||
Executive Officers | Class C Common Stock | Secondary Offering | ||||
Shareholders' Equity | ||||
Number of common shares held in Company | 2,560,955 | |||
Percentage of combined voting power | 100.00% | |||
Executive Officers | Class D Common Stock | ||||
Shareholders' Equity | ||||
Percentage of member's deficit and accumulated loss | 46.8 | |||
Current and Former Employees | ||||
Shareholders' Equity | ||||
Percentage of combined voting power | 3.60% | |||
Current and Former Employees | Secondary Offering | ||||
Shareholders' Equity | ||||
Percentage of combined voting power | 0.70% | |||
Current and Former Employees | Class A Common Stock | ||||
Shareholders' Equity | ||||
Number of common shares held in Company | 306,545 | |||
Current and Former Employees | Class A Common Stock | Secondary Offering | ||||
Shareholders' Equity | ||||
Number of common shares held in Company | 400,308 | |||
Percentage of combined voting power | 1.60% | |||
Current and Former Employees | Class D Common Stock | ||||
Shareholders' Equity | ||||
Number of common shares held in Company | 1,843,677 | |||
Current and Former Employees | Class D Common Stock | Secondary Offering | ||||
Shareholders' Equity | ||||
Number of common shares held in Company | 1,821,452 | |||
Percentage of combined voting power | 10.50% | |||
Zenith Merchant Services, LLC | Class A Common Stock | ||||
Shareholders' Equity | ||||
Number of shares issued during the period in satisfaction of a portion of contingent payment obligation in connection with acquisition remaining interest in a joint venture | 48,218 | |||
Blueapple | ||||
Shareholders' Equity | ||||
Percentage of member's deficit and accumulated loss | 53.2 | |||
Blueapple | Class B Common Stock | ||||
Shareholders' Equity | ||||
Number of shares issued during the period under conversion rights | 35,913,538 | |||
Percentage of combined voting power | 15.90% | 15.90% | ||
Blueapple | Class B Common Stock | Secondary Offering | ||||
Shareholders' Equity | ||||
Percentage of combined voting power | 15.90% | |||
MDP | ||||
Shareholders' Equity | ||||
Percentage of combined voting power | 38.40% | |||
MDP | Secondary Offering | ||||
Shareholders' Equity | ||||
Percentage of combined voting power | 26.20% | |||
MDP | Class A Common Stock | ||||
Shareholders' Equity | ||||
Number of shares issued in exchange of equity interests | 652,500 | |||
Number of common shares held in Company | 652,500 | |||
MDP | Class A Common Stock | Secondary Offering | ||||
Shareholders' Equity | ||||
Number of common shares held in Company | 652,500 | |||
Percentage of combined voting power | 2.60% | |||
MDP | Class C Common Stock | ||||
Shareholders' Equity | ||||
Percentage of member's deficit and accumulated loss | 46.8 | |||
MDP | Class D Common Stock | ||||
Shareholders' Equity | ||||
Number of common shares held in Company | 22,461,478 | |||
Number of shares issued during the period under conversion rights | 24,305,155 | |||
Number of votes per share | Vote | 1 | |||
MDP | Class D Common Stock | Secondary Offering | ||||
Shareholders' Equity | ||||
Number of common shares held in Company | 15,461,478 | |||
Percentage of combined voting power | 89.50% | |||
MDP | Current and Former Employees | Class D Common Stock | ||||
Shareholders' Equity | ||||
Number of votes per share | Vote | 1 | |||
EVO LLC | Secondary Offering | ||||
Shareholders' Equity | ||||
Number of common shares held in Company | 25,370,797 | |||
EVO LLC | Current and Former Management and Employees | Class D Units | ||||
Shareholders' Equity | ||||
Number of units held in LLC prior to reorganization | 1,106,528 | |||
EVO LLC | Executive Officers | Class D Units | ||||
Shareholders' Equity | ||||
Number of units held in LLC prior to reorganization | 720,986 | |||
Number of LLC interests received in connection with the reclassification of units outstanding in EVO, LLC as a result of the reorganization | 1,721,115 | |||
EVO LLC | Current and Former Employees | Class D Units | ||||
Shareholders' Equity | ||||
Number of units held in LLC prior to reorganization | 385,542 | |||
Number of LLC interests received in connection with the reclassification of units outstanding in EVO, LLC as a result of the reorganization | 951,548 | |||
EVO LLC | Blueapple | Maximum | ||||
Shareholders' Equity | ||||
Economic interest | 3 |
Shareholder's Equity - Organiza
Shareholder's Equity - Organizational structure following our IPO (Details) - shares | Sep. 30, 2018 | Sep. 20, 2018 | May 30, 2018 | May 23, 2018 |
Executive Officers | ||||
Shareholders' Equity | ||||
Percentage of combined voting power | 15.20% | |||
Current and Former Employees | ||||
Shareholders' Equity | ||||
Percentage of combined voting power | 3.60% | |||
Secondary Offering | Executive Officers | ||||
Shareholders' Equity | ||||
Percentage of combined voting power | 14.90% | |||
Secondary Offering | Current and Former Employees | ||||
Shareholders' Equity | ||||
Percentage of combined voting power | 0.70% | |||
Class A Common Stock | Investors | ||||
Shareholders' Equity | ||||
Percentage ownership of common stock in Company | 92.80% | |||
Number of common shares held in Company | 16,100,000 | |||
Class A Common Stock | Executive Officers | ||||
Shareholders' Equity | ||||
Percentage ownership of common stock in Company | 0.90% | |||
Number of common shares held in Company | 134,707 | |||
Class A Common Stock | Current and Former Employees | ||||
Shareholders' Equity | ||||
Percentage ownership of common stock in Company | 2.00% | |||
Number of common shares held in Company | 306,545 | |||
Class A Common Stock | Secondary Offering | ||||
Shareholders' Equity | ||||
Number of common shares held in Company | 25,429,606 | |||
Percentage of combined voting power | 41.40% | |||
Class A Common Stock | Secondary Offering | Executive Officers | ||||
Shareholders' Equity | ||||
Number of common shares held in Company | 179,540 | |||
Percentage of combined voting power | 0.70% | |||
Class A Common Stock | Secondary Offering | Current and Former Employees | ||||
Shareholders' Equity | ||||
Number of common shares held in Company | 400,308 | |||
Percentage of combined voting power | 1.60% | |||
Class B Common Stock | Investors | ||||
Shareholders' Equity | ||||
Percentage of combined voting power | 26.80% | |||
Class C Common Stock | Executive Officers | ||||
Shareholders' Equity | ||||
Percentage ownership of common stock in Company | 100.00% | |||
Number of common shares held in Company | 2,560,955 | |||
Class C Common Stock | Secondary Offering | Executive Officers | ||||
Shareholders' Equity | ||||
Number of common shares held in Company | 2,560,955 | |||
Percentage of combined voting power | 100.00% | |||
Class D Common Stock | Current and Former Employees | ||||
Shareholders' Equity | ||||
Percentage ownership of common stock in Company | 7.60% | |||
Number of common shares held in Company | 1,843,677 | |||
Class D Common Stock | Secondary Offering | Current and Former Employees | ||||
Shareholders' Equity | ||||
Number of common shares held in Company | 1,821,452 | |||
Percentage of combined voting power | 10.50% | |||
EVO LLC | ||||
Shareholders' Equity | ||||
Number of units held | 17,355,899 | |||
Ownership interest (as a percent) | 31.30% | 31.30% | 21.60% | |
EVO LLC | Secondary Offering | ||||
Shareholders' Equity | ||||
Number of common shares held in Company | 25,370,797 | |||
Blueapple | Class B Common Stock | ||||
Shareholders' Equity | ||||
Percentage of combined voting power | 15.90% | 15.90% | ||
Blueapple | Class B Common Stock | Secondary Offering | ||||
Shareholders' Equity | ||||
Percentage of combined voting power | 15.90% | |||
MDP | ||||
Shareholders' Equity | ||||
Percentage of combined voting power | 38.40% | |||
MDP | Secondary Offering | ||||
Shareholders' Equity | ||||
Percentage of combined voting power | 26.20% | |||
MDP | Class A Common Stock | ||||
Shareholders' Equity | ||||
Percentage ownership of common stock in Company | 3.80% | |||
Number of common shares held in Company | 652,500 | |||
MDP | Class A Common Stock | Secondary Offering | ||||
Shareholders' Equity | ||||
Number of common shares held in Company | 652,500 | |||
Percentage of combined voting power | 2.60% | |||
MDP | Class D Common Stock | ||||
Shareholders' Equity | ||||
Percentage ownership of common stock in Company | 92.40% | |||
Number of common shares held in Company | 22,461,478 | |||
MDP | Class D Common Stock | Secondary Offering | ||||
Shareholders' Equity | ||||
Number of common shares held in Company | 15,461,478 | |||
Percentage of combined voting power | 89.50% |
Shareholder's Equity - Use of P
Shareholder's Equity - Use of Proceeds (Details) - USD ($) $ in Thousands | Sep. 20, 2018 | May 25, 2018 | Sep. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 |
Shareholders' Equity | |||||
Repayment of debt | $ 743,342 | $ 645,478 | |||
Remaining net proceeds used for working capital and general corporate purposes | $ 600 | ||||
Sterling Payment Technologies, LLC | |||||
Shareholders' Equity | |||||
Payment of deferred purchase price | 52,600 | ||||
Term loan | Second lien senior secured credit facility | |||||
Shareholders' Equity | |||||
Repayment of debt | $ 178,200 | 178,200 | |||
IPO | |||||
Shareholders' Equity | |||||
Net proceeds from issuance of common stock | 231,500 | ||||
Other offering costs | $ 10,300 | ||||
Secondary Offering | Class A Common Stock | |||||
Shareholders' Equity | |||||
Net proceeds from issuance of common stock | $ 25,000 |
Shareholder's Equity - Secondar
Shareholder's Equity - Secondary Offering (Details) - USD ($) $ / shares in Units, $ in Millions | Sep. 30, 2018 | Sep. 20, 2018 | May 30, 2018 | May 23, 2018 |
EVO LLC | ||||
Shareholders' Equity | ||||
Ownership interest (as a percent) | 31.30% | 31.30% | 21.60% | |
Executive Officers | ||||
Shareholders' Equity | ||||
Percentage of combined voting power | 15.20% | |||
Current and Former Employees | ||||
Shareholders' Equity | ||||
Percentage of combined voting power | 3.60% | |||
MDP | ||||
Shareholders' Equity | ||||
Percentage of combined voting power | 38.40% | |||
Class A Common Stock | Investors | ||||
Shareholders' Equity | ||||
Number of common shares held in Company | 16,100,000 | |||
Class A Common Stock | Executive Officers | ||||
Shareholders' Equity | ||||
Number of common shares held in Company | 134,707 | |||
Class A Common Stock | Current and Former Employees | ||||
Shareholders' Equity | ||||
Number of common shares held in Company | 306,545 | |||
Class A Common Stock | MDP | ||||
Shareholders' Equity | ||||
Number of common shares held in Company | 652,500 | |||
Class B Common Stock | Investors | ||||
Shareholders' Equity | ||||
Percentage of combined voting power | 26.80% | |||
Class B Common Stock | Blueapple | ||||
Shareholders' Equity | ||||
Percentage of combined voting power | 15.90% | 15.90% | ||
Class C Common Stock | Executive Officers | ||||
Shareholders' Equity | ||||
Number of common shares held in Company | 2,560,955 | |||
Class D Common Stock | Current and Former Employees | ||||
Shareholders' Equity | ||||
Number of common shares held in Company | 1,843,677 | |||
Class D Common Stock | MDP | ||||
Shareholders' Equity | ||||
Number of common shares held in Company | 22,461,478 | |||
Secondary Offering | EVO LLC | ||||
Shareholders' Equity | ||||
Number of common shares held in Company | 25,370,797 | |||
Secondary Offering | Executive Officers | ||||
Shareholders' Equity | ||||
Percentage of combined voting power | 14.90% | |||
Secondary Offering | Current and Former Employees | ||||
Shareholders' Equity | ||||
Percentage of combined voting power | 0.70% | |||
Secondary Offering | MDP | ||||
Shareholders' Equity | ||||
Percentage of combined voting power | 26.20% | |||
Secondary Offering | Class A Common Stock | ||||
Shareholders' Equity | ||||
Number of shares of stock issued | 8,075,558 | |||
Share price | $ 24.50 | |||
Net proceeds from issuance of common stock | $ 25 | |||
Number of common shares held in Company | 25,429,606 | |||
Percentage of combined voting power | 41.40% | |||
Secondary Offering | Class A Common Stock | Executive Officers | ||||
Shareholders' Equity | ||||
Number of common shares held in Company | 179,540 | |||
Percentage of combined voting power | 0.70% | |||
Secondary Offering | Class A Common Stock | Current and Former Employees | ||||
Shareholders' Equity | ||||
Number of common shares held in Company | 400,308 | |||
Percentage of combined voting power | 1.60% | |||
Secondary Offering | Class A Common Stock | MDP | ||||
Shareholders' Equity | ||||
Number of common shares held in Company | 652,500 | |||
Percentage of combined voting power | 2.60% | |||
Secondary Offering | Class B Common Stock | Blueapple | ||||
Shareholders' Equity | ||||
Percentage of combined voting power | 15.90% | |||
Secondary Offering | Class C Common Stock | Executive Officers | ||||
Shareholders' Equity | ||||
Number of common shares held in Company | 2,560,955 | |||
Percentage of combined voting power | 100.00% | |||
Secondary Offering | Class D Common Stock | Current and Former Employees | ||||
Shareholders' Equity | ||||
Number of common shares held in Company | 1,821,452 | |||
Percentage of combined voting power | 10.50% | |||
Secondary Offering | Class D Common Stock | MDP | ||||
Shareholders' Equity | ||||
Number of common shares held in Company | 15,461,478 | |||
Percentage of combined voting power | 89.50% | |||
Secondary Public Offering | Class A Common Stock | ||||
Shareholders' Equity | ||||
Number of shares of stock issued | 7,000,000 | |||
Secondary Offering Selling Stockholder | Class A Common Stock | ||||
Shareholders' Equity | ||||
Number of shares of stock issued | 22,225 | |||
Secondary Offering Overallotment | Class A Common Stock | ||||
Shareholders' Equity | ||||
Number of shares of stock issued | 1,053,333 |
Stock Compensation Plans and _3
Stock Compensation Plans and Share-Based Compensation Awards - Share based compensation expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Stock Compensation Plans and Share-Based Compensation Awards | ||||
Share-based compensation expense | $ 1,758 | $ 0 | $ 53,893 | $ 0 |
Income tax benefit | $ 68 | $ 3,914 | ||
2018 Plan | Class A Common Stock | ||||
Stock Compensation Plans and Share-Based Compensation Awards | ||||
Shares reserved for issuance | 7,792,162 | 7,792,162 |
Stock Compensation Plans and _4
Stock Compensation Plans and Share-Based Compensation Awards - Awards, UAR, RSA (Details) $ / shares in Units, $ in Thousands | May 25, 2018employee$ / sharesshares | Sep. 30, 2018USD ($)shares | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)shares | Sep. 30, 2018USD ($)shares | May 24, 2018USD ($) | Sep. 30, 2018USD ($)$ / sharesshares | Sep. 30, 2017USD ($) |
Stock Compensation Plans and Share-Based Compensation Awards | ||||||||
Share-based compensation expense | $ | $ 1,758 | $ 0 | $ 53,893 | $ 0 | ||||
Class D awards | ||||||||
Stock Compensation Plans and Share-Based Compensation Awards | ||||||||
Granted fair value (in dollars per share) | $ / shares | $ 16 | |||||||
Fair value (in dollars per share) | $ / shares | $ 16 | |||||||
Share-based compensation expense | $ | $ 42,800 | $ 0 | ||||||
Vested (in shares) | 2,672,666 | |||||||
Number of employees or former employees who held awards | employee | 15 | |||||||
UAR awards | ||||||||
Stock Compensation Plans and Share-Based Compensation Awards | ||||||||
Granted fair value (in dollars per share) | $ / shares | $ 16 | |||||||
Fair value (in dollars per share) | $ / shares | $ 16 | |||||||
Share-based compensation expense | $ | $ 300 | $ 0 | $ 9,000 | |||||
Unrecognized compensation expense | $ | $ 700 | $ 700 | $ 700 | $ 700 | ||||
Vested (in shares) | 4,125 | 543,323 | ||||||
Awards surrendered for tax obligations (in shares) | 52,476 | |||||||
Number of employees or former employees who held awards | employee | 35 | |||||||
Outstanding unvested awards (in shares) | 63,452 | 58,809 | 58,809 | 58,809 | 58,809 | |||
Forfeited (in shares) | 518 |
Stock Compensation Plans and _5
Stock Compensation Plans and Share-Based Compensation Awards - RSU (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018USD ($)$ / sharesshares | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)$ / sharesshares | Sep. 30, 2017USD ($) | |
Stock Compensation Plans and Share-Based Compensation Awards | ||||
Share-based compensation expense | $ | $ 1,758 | $ 0 | $ 53,893 | $ 0 |
RSUs | ||||
Stock Compensation Plans and Share-Based Compensation Awards | ||||
Share-based compensation expense | $ | $ 600 | $ 800 | ||
Number outstanding | ||||
Granted (in shares) | shares | 522 | |||
Forfeited (in shares) | shares | (4) | |||
Balance at end of period (in shares) | shares | 518 | 518 | ||
Weighted average fair value | ||||
Granted (in dollars per share) | $ / shares | $ 16.19 | |||
Forfeited (in dollars per share) | $ / shares | 16 | |||
Balance at end of period (in dollars per share) | $ / shares | $ 16.19 | $ 16.19 | ||
Unrecognized compensation expense | $ | $ 7,600 | $ 7,600 | ||
Vesting period | 4 years | |||
Weighted average period outstanding for unvested RSUs | 3 years 6 months |
Stock Compensation Plans and _6
Stock Compensation Plans and Share-Based Compensation Awards - Stock Options (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Stock Compensation Plans and Share-Based Compensation Awards | ||||
Share-based compensation expense | $ 1,758 | $ 0 | $ 53,893 | $ 0 |
Stock options | ||||
Stock Compensation Plans and Share-Based Compensation Awards | ||||
Share-based compensation expense | $ 900 | $ 1,300 | ||
Number outstanding | ||||
Granted (in shares) | 2,140 | |||
Forfeited (in shares) | (19) | |||
Balance at end of period (in shares) | 2,121 | 2,121 | ||
Weighted average fair value | ||||
Granted (in dollars per share) | $ 6.84 | |||
Forfeited (in dollars per share) | 6.68 | |||
Balance at end of period (in dollars per share) | $ 6.84 | $ 6.84 | ||
Unrecognized compensation expense | $ 13,100 | $ 13,100 | ||
Weighted average period outstanding for unvested stock options | 3 years 7 months 6 days | |||
Vesting period | 4 years | |||
Expiration period | 10 years |
Stock Compensation Plans and _7
Stock Compensation Plans and Share-Based Compensation Awards - Fair Value Assumptions (Details) - Stock options - $ / shares | 3 Months Ended | 9 Months Ended |
Sep. 30, 2018 | Sep. 30, 2018 | |
Assumptions used in estimating grant date fair values | ||
Expected life (in years) | 7 years | 7 years |
Weighted average risk free interest rate (as a percent) | 2.89% | 3.04% |
Expected volatility (as a percent) | 33.99% | 34.28% |
Expected dividend yield (as a percent) | 0.00% | 0.00% |
Weighted average fair value at grant date | 9.23 | 6.84 |
Subsequent Events (Details)
Subsequent Events (Details) - Oct. 16, 2018 - Subsequent Event - ClearONE € in Millions, $ in Millions | EUR (€)customer | USD ($)customer |
Subsequent Events | ||
Percentage of interest acquired | 100.00% | 100.00% |
Number of merchants served by acquiree | 10,000 | 10,000 |
Total consideration transferred | € 5.4 | $ 6.3 |