EVTC - Earnings call transcript Q1 2019

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Operator

Good afternoon, everyone, and welcome to the EVERTEC's first Quarter 2019 Earnings Conference Call. Today's conference call is being recorded. At this time, I would like to turn the call over to Kay Sharpton, Vice President of Investor Relations. Please go ahead.

Kay Sharpton

Thank you, and good afternoon. Mac Castrillo, President our are Officer; Chief today Joaquin and Chief me Schuessler, and our Executive With Financial Officer. this of May replay call available be A until X. will Wednesday, financial Web site the the listed replay Access evertecinc.com. section under is information our in Investor for today's on available release, of is Relations which

Investor is the replay, it accompanies that this site. call, and For the was May presentation this those listening of X. a held accessible Relations in the is call Web to Please section note there conference

that Before under and remind update performance cautions the that made Please may forward-looking future could are about we materially uncertainties. EVERTEC of everyone that not contain obligation forward-looking statements I'd like forward-looking performance. to Annual risks actual All today Exchange reflect for begin, statement. to Securities are we our undertake most with Company's Form reflect no Report for factors Act events this subject Commission statements differ the Reform forward-looking after and statements cause future expectations results expectations and recent call statements on as these of our from XX-K any statements only, to Litigation to to the These defined known occur filed to Securities any XXXX. this our guarantees unknown Private current the and that refer call.

I'll information the measures non-GAAP share. are net to additional today's hand today's SEC certain income During constitute common measures earnings that such financial supplemental adjusted release per and in GAAP included over Reconciliations and under provide as call, management slides. earnings EBITDA, and will now rules, also will Mac. call to adjusted certain adjusted information

Mac Schuessler

Good afternoon Kay. Thanks, everyone.

expectations. results our of the high-end with our of XXXX, which pleased quarter was at the are first We for

an were you $XXX we Puerto to recovering an financial year Beginning of compared of recovery the and X% February Caribbean as to provide Rico I'll executing elevated relative benefit developments. increase hit recent January and hurricanes rebuilding still slide are and the and on was revenue well September on last highlights some our the update in that was Rico's Total Puerto million, activity. XXXX. of quarter's with from increased the to We from four, continue and XXXX. economy cover

benefited and was also million compared the share $XX or EBT related from of to Rico. returned adjusted through revenue the and million operating $X.XX, We We Adjusted over our significant of increase $XX prior to growth Government an flow approximately repurchases. X% generated was to per last services cash share year, dividends X% earnings Puerto EBITDA and for year. shareholders

of slide growth Moving we first, progress XX%. in transaction pleased revenue approximately on with Puerto XX%, Rico grew Puerto driven the to by and on the five, strong which Caribbean, Rico were in approximately

recovery relief We solutions continue value-added partners. tax increased and programs, deployment as payments to from for and benefit as continued well and our merchants

this on time, it at funds, federal a revised offers local Regarding the the although certified into to federal it Board Rico, submitted of of government includes XX, expectations. a the the flowing and and the by not revised plan fiscal is Puerto funds view government March PROMESA timing Board us

at the funds on be of $XX continue to deployment total certified $X.X to now $X.X originally funds is to the than anticipated billion. projections, of approximately new Board than is XXXX billion, be projected Based fiscal half the XXXX. received PROMESA in projected XXXX billion by the at estimate to higher slower is Although, same anticipated be these of such funds XXXX be approximately expected plan.

their increase Puerto this we On will to over the in a Rican note, in file Treasury than revenue of like believe we'd process, island. close tax debt the that previous of continue economic reported health see, We the number the to on time. year fiscal the driver federal positive a these year. believe significant a government island's the above and tax compared ultimately Department long-term pace slower the the to Although, necessary returns impact funds Puerto positively projections. restructuring for of the The is are expects previous to important economy Rico steps

original informed Moving delay we turn to in migrations results, given this attrition financial performing one Latin our Latin the to slide six, year, with up of in license our the over quarters. will in our expectations in initiatives focus America sales the and recently call forward of strategic continue in that, our Joaquin. summary, I America will we strong end We migration Rico. year. for advancing lower are sharing and to progress update, and now any we'll XXXX the at was the pleased quarter. look Puerto revenue year-over-year We In as With coming the client the and anticipated impact of uneven QX for is to of were another on X% which result client given the

Joaquin Castrillo

everyone. you, Mac, XXXX of afternoon first good Thank and quarter our will review a now provide results. I

eight, the Total in was first prior the $XXX.X quarter million, to to quarter see first for you'll $XXX.X the consolidated slide X% million up revenue Turning EVERTEC. year. results compared for

last effects to While the it somewhat still the was given a were of easier January year, feeling February hurricane. comparison and

year. Puerto to one-time for of from Government volume quarter of Rico. versus flat March service $X.X for in the of EBT relatively manage the we prior revenue benefited contract the million month the We Our was sales related

been $XX.X compared increase in in drove point the was of the approximately XX.X% the The the Lastly, increase $XX year. that ticket we to margin. XX the tax million expenses tax in our rate adjusted adjusted to platforms. that be other was spending of higher year. offset XX% in continue year-over-year our slightly $X.XX this the technology reflects margin result benefit, below. and the year as prior services anticipate quarter The basis EBITDA transactions And decrease quarter, EBITDA EBITDA corporate Adjusted from a normalized risk EBT EBT will million, a lower in disaster the we've we and have quarter partially in normal X% EPS as or quarter than to revenue, projects. and this primarily represents effective compared year. prior increased higher would Without XX.X%. year, approximately year for investment elevated decrease one-time the margin prior margin benefited XX.X%. to full the the services X% from related from year network The by our one banking prior rate core last a experienced Adjusted margin in EBITDA margin new managed of also was grew and benefited an was an Adjusted for average

first in the slide first lapping driven Average Merchant on as transactions, our range. and XX% cover volume in the contributed the to two year. the prior and Acquiring higher last net to EBT toward expectations year, versus as Acquiring. increased our Adjusting results funding to Merchant driven due X% prior Moving nine, single-digit the part March, ended March, end year benefits year-over-year the EBT with low-to-mid softer saw months to ticket and sales extra this revenue in flat of the that began growth by extra approximately starting with increased of sales was million. March continues sequentially that the month spread. the in a In early slightly recovery volumes results; by of quarter, I'll were have funding $XX The year well March more of of we funding. disaster increase been volume normalized in segment net revenue for as would EBT that to the impact in declined however, levels. Lower spend move EBT line in In a

million, continued impact the results which On to to slightly the last margin you the in $XX to quarter. last up as of this points reflecting Adjusted volume XX.X%, over sales lower We grew see last EBITDA anticipate have see from also levels. Transaction approximately first and down XX, margin XX similar the was March, to was were as compared segment compared volumes average up and slide compared XX% XX%. for we EBITDA few Services, Revenue and April, the on similar in approximately flat Adjusted the approximately to segment year, February basis last year Rico quarter will up year. ticket $XX results January was to the benefited a Puerto million, Caribbean year. segment. the as of XX% the comparable for margin quarters. Payment the next For softer

services last revenue due revenue year. benefited quarter have year. year. and $XXX,XXX segment as one-time for other ATH last to compared was service and services the XX, year. would we we ATH implemented to by been Organic EBT we attrition. on Movil XXX recur. primarily continue segment for license the the XX% Services as from revenue was was revenue Adjusted compared such flat and primarily in year, million, I transactional On as consulting was in results not growth or points for the inter-company EBITDA compared to fees from will margins approximately the benefit to and driven transactional to XX.X% year the to prior third basis for sale see our the approximately increasing that the slide Revenue first last high the Business parties last Movil that X% quarter last offset as implementations Payment new as $XX.X million margin mentioned, Adjusting to of EBITDA contract as approximately relatively EBT license EBT revenue, fees Adjusted fees. in services switching segment. margin to client by Additionally, Latin and of you due This $XX.X or new down was did our compared

mentioned revenues result sales through will our consulting somewhat that component have license and uneven that we are Chile the year. non-recurring. acquisition, As including of revenues our in throughout And previously, services LatAm

revenue strategy from which Movil of more continue licensing focus recurring a to Movil, to will processing on growing result shifting We eventually a and in a base. our

to from the inter-company migrations Puerto $X revenue low-to-mid segment growth basis points XX.X%, anticipated segment client as million. the million and have to now year to now is will Additionally, XXX year year, Total the Rico. and delays closer adjusted was up some full by driven in our license to we Adjusted full single-digits. the client sale for to of be impact LatAm expect further approximately EBITDA margin was migration and for last services be compared $X.X

anticipate 'XXs and Segment. we find results the mid For the for the full slide the On and Business $XX.X to up Business Solutions last softer adjusted in new revenue be lapping of well in the margin Rico. services not Solutions you'll now approximately EBITDA due quarter for XX, the inter-company revenue. by driven both to the year, was Banco growth million. was Popular as comparison segment X% to as this Government Revenue first to in year, Puerto services license

For the impacted compared EBITDA $XX by the down quarter. in quarter, basis to expenses adjusted was other increased year. The primarily adjusted XXX and negatively to and that last obligation margin as million decrease EBITDA driven infrastructure related EBITDA was was adjusted expenses margin approximately contractual points XX.X%, the

Moving our you and on segment. to XX, a see summary corporate of will slide other

from revenues our continue efforts as our Our Services, approximately was Payment includes other XX% we million an of Services, $X.X capitalized shifting products Puerto was in of related and Caribbean, impact Payment prior model. first increase million, year. our to the quarter over resources were LatAm prior and advance America intercompany not negative Rico a eliminations, Intersegment suite expense use to in which processing $X.X to Latin year. Corporate

the basis from coming XXX on full other the this is other post to a in million, basis, primarily inter-company was lower as due and approximately the be a revenue, prior of approximately hurricane due $X.X Corporate the in similar impact, X% percentage approximately EBITDA to largely above adjusted corporate to will other year and and of of timing X.X% negative lower a points percentage now to as an and reflecting transactions impact related the and anticipated million, year delays. year a Of elimination impact revenue prior increase spending activities quarters. be of expect Excluding inter-company $X.X we total

continue million. cash compared our our million And was as other approximately on settlement differences. this Net overview the capital to $XX operating million, or year-to-date flow by expenditures XX, on and restricted decrease cash a expenditures of and provided of timing million $XX $XX including cash prior we million. $XX cash range a capital million activities balance were Capital working $XX Moving approximately includes impact year-to-date year. $X approximately beginning approximately anticipate to to million, to of $XX in was Slide our

in million revolver, total debt of $X approximately $X our in payments by of resulting withholding debt net million. scheduled paid offset we on share-based in and taxes increase a Next, approximately $X use million compensation,

We of a we repurchased $XX quarter also return paid million common And of year-to-date. million. stock for shareholders cash approximately approximately dividends this $X for of $XX.X million total

$XX million use And XXXX. under company's $X.XX XXst, XXXX record approximately June December Xth. have paid announced available We future of another through as the dividend to share be for we program repurchase May shareholders on to of recently Xth,

cash March of balance was million, XXst $XX cash. this included ending million as of $XX and restricted Our approximately

Moving of to March our XX, you of will slide a as summary XX, find XXXX. debt

total net was of million $XXX and approximately comprised million million the long-term position debt borrowings of $XXX debt. Our unrestricted approximately quarter ending of $XX cash short-term and

approximately interest rate was average X.X%. Our weighted

the credit agreement to which net calculation to debt month net the million. $XX trailing applied X.X adjusted debt the Our EBITDA to reflecting cash terms, limits was times, XX

XXst, includes available borrowing our revolver. $XXX exclude March under of liquidity million. cash total the was This balance As capacity and restricted

now Moving XX, to our I guidance. update provide will slide XXXX on an

$XXX the We representing of maintaining on our our over million end a of resulting year. end X% The disbursement continued government, increase of revenue in in outlook funding are to reflects range range slower $XXX around the a previous overall cautious the XXXX in higher million, funding on relief disbursement the QX range the raising of our the expected last when a and and of the pace lower original revised for year the our end X% to expectations the results of the for our range in lower revenue revenue the of the year, local of of year for light assumes outlook of to fiscal XXXX. compared originally remainder funding plan which and particularly year the uncertainty high

we be for anticipate Regarding approximately our margin, that XX% EBITDA to margin year. adjusted overall continue the will

our recent slightly costs came above and year. Our on due now to the most the operating anticipated our expectations remainder depreciation to be the are below in original interest of indications rate for hikes slightly forecast earlier our Fed

increased benefit $X.XX, $X.XX per the outlook to summary, EVERTEC earnings QX of and And reflects for has been adjusted well this which look was over share to X% remainder as a Our $X.XX share the repurchases compared the results to from benefit year. forecast the common to as as X% another our quarter range In in as in from QX change coming a outlook well of made expense the the XXXX. share changes good in lower for on these for represents XXXX. meeting forward a it to count I pleased months. you reflect interest you we're to and seeing as

and We the will the please go line. open questions. open for ahead Operator, call now

Mac Schuessler

recover Puerto like seeking to The committed And May Board clarifying any expires released imply statement the "Do for of as the the if tomorrow, and media the Joaquin, before I'd special more development XXX the local a lawsuits demonstrates Rican payments that wrongdoing. of we the to basis line, deadline government the of the necessarily comment claim". open claims on than Oversight order Financial actions, Yesterday, any the legal today. payments proper filed X. that received Oversight Board in Puerto limitation committee dismiss Oversight recent a Oversight these Rico's will Board the in a from Board Financial and individuals not Management entities vendor statute

one -- dismissal we should subject can was of to on defend. the mean, obtained parties then a obtain we confident, causes more of action were properly has which those accounts. a feel of believe I a XXX the EVERTEC all however, So, various we lawsuit, all And small complaint that we

we the today. the before saw in did into go anyone media has I Rican address in case that want Q&A the Puerto So in It been press. to that

So to with may questions that, we you any call will that turn over the have.

Operator

first Our Schneider Thank Instructions] Sachs. you. go [Operator comes Jim Please ahead. with today from question Goldman

Jim Schneider

all, that, on, I just throughout update and apologize partnerships afternoon, any wanted efforts? was development I you first or Latin of if Good of an wondering taking just kind that. deals missed but of on that for maybe thanks to comment could I you your in my business America get if I the new see pipeline question.

Mac Schuessler

on Thanks is do Jim, year markets opening, the competitive We kicking Yes, call the lot off seen we've regulatory see these question. in our this and Mac. really that shifts for talked some we a and the markets. clear

have sign we announce but are We are across call. on still this do to anything a but have looking we're we institutions the pipeline, a on not sales focused specifically very at healthy front partnering and until different to contract, we with M&A we region, as both financial those well, didn't on on constantly the but going comment specific

Jim Schneider

you you from government contracts? the you of trend then I in you'd just and a hurricane kind terms whether as of the what terms kind benefiting to of on side, in the maybe well, on knock-on steady and Business in solutions how also maybe commented the maybe contracts a how some you're course So, Solutions that of over year? you the elsewhere before item can comment efforts line follow-up, other expect you've relief those of that's wins on think on seeing an just perspective Very local can kind and of and improvement of comment of effects expect

Mac Schuessler

last call, of Puerto we in our with about Yes, like I'll in I segment. signed the one last talked customers the we in we largest talk which Santander qualitatively, extension just an mean about Rico, the call talked is in

call consulting, of QX Department that a signed period the the is pretty between long a typically also to deal the QX of ago call and with We shorter time. wasn't Education due the

we continue we and services. that's… seeing the well this still best I many to as we Solutions, nothing and that to we Business I in and for opportunities are segment, but there provider this market think areas that perform in again, don't know demand the in finding still execute call, on are if -- are are Joaquin, I announce in well, mean, We our

Joaquin Castrillo

No, I think that it. covers

Jim Schneider

you thank very much. Great,

Mac Schuessler

Jim. Thanks,

Operator

next comes Please Vasu with question ahead. Our from go Govil KBW.

Vasu Govil

Hi, quarter. question thanks nice my and for taking

Mac Schuessler

you. Thank

Vasu Govil

out you guess, Just the already question, revenue that I in called for first guidance? benefit was the one-time that quarter, the contemplated

Mac Schuessler

Hi, Vasu.

well, guided did have weren't included we to that our last when one Obviously, range end the if we of yes, the the part yes, of our the as of close out higher with we we were of the government. going call. of range. And sure we So end have higher part as engagements on

Vasu Govil

And feeling I proposed plan, a just how but the guess Got are Feb, back then the changes of I in commentary in on fiscal year? rest government year, the you the question were out it. the you the are you certain that where would of about about of called sort worse, is helpful. feeling be better, Any same versus rest new we the know there

Joaquin Castrillo

And think we on the based given performance that I in are feeling QX. in which we we confident we're lower had increasing out. end of the the we what put the guidance range, positive said, that is

cautious, fees Popular fed as out the from to new additional to government given them our Solutions, of Merchant continue through However, and funding relief and initiatives assisting in government to up Payment we be Acquiring island, expects obviously incremental try both and we with what revenues. to well. ground the in but with we information And and continue continue their we alluded terms in there helping and getting Business opportunities just to, as on see to for Mac look with here in the continue come and what or the strategies work

Vasu Govil

was segment. going I just I on help with are quarterly know quarter, we because then but And have us, you EBT helpful. revenue the lastly, guess, starting by don't guidance, you cadence hoping growth That's away next quarterly could I this that benefits provide

Joaquin Castrillo

our you Revenue? the the We very attempt… able of very, I to great given beginning. quarterly that business, was it's at way but answered the love difficult, the can't the business to, but operates, we think way give a would question but that because guidance, that -- be

Vasu Govil

particular Anything program by we because careful we should EBT that model, the while be way… the like of

Joaquin Castrillo

past. will be softer, cadence quarterly we've slightly that, the similar is very look previous say, what We to we years. to than to do to in similar QX the I'd expect expect be other but No, do had cadence

Vasu Govil

you much, guys. Thank very

Mac Schuessler

Vasu. Thanks,

Operator

with comes Mihalos question next from Cowen. go Our George ahead. Please

George Mihalos

will flattish for missed that, Hey sort any of the merchant of the the there? taking recent guys, that sort over sure is my expectation impact in remainder the Easter on I quarters. trends of this, out some business Not acquiring, worth calling if sort commentary but be grow question. thanks the of sort more digits of the of three that would last there low-single year was And

Mac Schuessler

and in of last in Rico, So Puerto of kind so business. split of call Good in March related a the this which out fell had one in that we in a in time have anything Easter April, time Easter we really weekend year April, so to the terms fell Friday see around the of This we to Easter, how had is holiday Sunday the days kind then don't impact around. specific particular that

obviously, when the rest throughout as to relates the it funding volume, EBT sales year, a previous had we XXXX comparable. we compared the As of to

continue will year, is some implementing increases So before, And of sales fees transactional offset seeing. volume the we and reaction impact -- growth of look and or for given the to, mentioned say growth other for inter-sectional that would as or remainder to we're in that. fees it what I ways what I different reasonable of in

that The supermarkets, coming in had other going was previous lower thing on volume I'll our which to mention et That was a is we at in coming year spread. EBT spread. in the was mainly cetera,

spread. the kind back a it a in portfolio more of now in pre-hurricane, result the even slight is So shifting will the normalized increase levels, fact that

George Mihalos

then, months. provide last you up has some you think talked conversation the couple helpful. some like the for and on changed that Mac, about markets update any last LatAm opportunities, geographies. some or creating very in can that's maybe call of the the you more maybe Opening that regulation And Okay, I of there

Mac Schuessler

call, an well say we finally, last talked has pitch those Argentina for at Advent, recall sold about Or overtime, Chile we is and opportunity was alternatives to looking going interest to very so they're banks different is don't continue in there making to on process Prisma the about, would very that and what probably any the customers, to been Chile with more those in vocal the an and are to Santander, you markets so the talked be I No, seen America but in alternatives, past. seeing it Latin not update year. we across wins, opportunities to very, focused have on very during TransBank, are going are than we in We we've as is best of those least

George Mihalos

thank helpful, you. Very

Mac Schuessler

George. Thanks,

Operator

comes Our Please with next question from Deutsche Bryan ahead. Keane Bank. go

Korey Marcello

Hi is Bryan this Marcello on for guys, Keane. Korey

continues questions, quick that on thinking update but forward of on the kind give little some margins just to very two side soft. in you're Business Can the well, how us about perform are margins Just going you Solutions business? that

Mac Schuessler

the that business -- in obviously, saw segment. growth is terms government the in we what some did year-over-year. in that that Also from a to slightly continue the we of and bring lower invest as current obviously than at of Korey, mentioned, have usually our QX, margins But overall impact in Sure, that quarter we we a we good the margin we technology, we margin. saw and in will from saw

bit of year, and next don't obviously, year-over-year expect quarters, in prior impacted the we seeing whole that level three providing last we in the growth, some were XXX% and little to services still we first the single-digits for in the of they And two services that transactional that and a months the end expect weren't in come down that up two are the year. that mid-to-low growth year -- the of given hurricane. we're of of the years by Some those

Korey Marcello

Got obviously it. talking But change you timing the about clear. attrition curious how out pretty anything throughout does plays being I guys that previously conversions America, year. the state kind that terms And impact from then think kind change guess that it kind a the was guys. on changed on how you has guys so, low-end quarter, and year. in for quarters, or of impact, XXX,XXX on of just steady perspective the Latin through Thanks, That's of has I expecting it you're were I of what think the this that the

Mac Schuessler

The attrition.

Joaquin Castrillo

expecting throughout still it consistent the Korey this were relatively be year we point. Yes, to at

Korey Marcello

guys. Thanks,

Operator

ahead. comes Our Napoli next Blair. from with go Bob William question Please

Bob Napoli

Thank and organic Payments Latin how visibility outside of that you, growth you PayGroup? Question -- on the Rico? Colombia What mean a growth America is I have the Rico outside of and Puerto How thoughts double-digit of you of steady type generally, the on good making are and growth afternoon. about, in performance is do business doing? are Puerto

Mac Schuessler

Yes, Bob, this is Mac.

So I of what acquisition PayGroup. would very the pleased continue with say, be to we

and year, As mean we more doubled talked the last about we've it of the some 'XX through EBITDA the evens last to organically I so. call, grown from end business, of it acquisition, of some

these the the region issuing in is markets we very products well running merchant license whether model a received. PayGroup that it's throughout banks, are haven't that or the product that very, open, being processing breast or it's We typically multiple the are is finding product product in

the with we the of up. open but that a unique unique, solution and we given business, performance markets, are happy in presence very optimistic we and have be as to the that on it's that we they some So a have we current advantage of continue these have

since the not call. has changed our last So optimism

Bob Napoli

bigger you for And -- that there much then, and ago, few any a outlook obviously, a for making a years market chance of what's made EVERTEC? the Colombia, a acquisition big market small

Mac Schuessler

have as still investments hopeful still markets been of that will the well. we is we some When The markets other we've of talked about making in the region. move so -- in a because the the Colombia focus seen market We're significant far one and we -- larger it's we're opening. market -- have for of Colombia Yes, us, the trends because that as investment, more there. as

in So we're still But of and there's market. noise quickly. acquisition. to moving There a appear happy are Chile frankly, some more with the Argentina that and banks bit But other of other be about in. quickly markets for anticipate that two, some Redeban we're looking may alternatives. than more move and markets there's some noise Credibanco, the markets of other the still I the would and

Bob Napoli

pvot Lastly, are give Movil those can an and you ATH update how on progressing?

Joaquin Castrillo

sure. Yes,

of in terms in we've terms of ATH Movil given half last of In we also continue businesses that and a usage. see ATH monetize to to continuing I a obviously, volume break growth the continuing And see we very to register fees terms Movil, business continue we as ground that in going in but second year-over-year. product. actually said good And we some it's place year. out we've but necessarily seen related put also platform. can to see we the we ATH through And before, the of see side that which What to to usage, PXP, specific continue the -- gain Movil to continue don't

Mac Schuessler

And I actually would today the team product say went even just mean, sort too, map. with of road I the

investing and And but Business PXP more on other sources that very other as money people focused rolling because to we're very can the make use to in platform also we that find ATH to are features out also utility, sure revenue. on of Movil on many increase functions products the of and We that. make instead we're getting focused

very focused So significant past performance. but call, the we're it and pleased its update no last with on

Bob Napoli

the And pvot or [ph] pvot?

Joaquin Castrillo

we XX continue mentioned, With well, we some obviously to Yes. in ground, days. gain also pvot, as

very very cater to continuing it's sell on clients And add to to. we we to move features to and to focus are these continuous the continue different So positive well. that trying and to functionality

are of continue as We focus in point the and very with we're future. be island, against competing the some of a continues to to that the the into product be it how to here ISOs excited

Mac Schuessler

With pipeline. a healthy

Joaquin Castrillo

healthy Correct, a pipeline. very

Bob Napoli

you. it. Thank Appreciate

Joaquin Castrillo

Thanks, Bob.

Operator

comes Raymond ahead. Davis with Our Please next go from James. question John

John Davis

guys. afternoon, Good

your I of on just Joaquin, was in First touch funding kind are people seem year, the I wanted in assumptions the think through of and impact have the the to probably this the baked obviously, quarter. of an flowing beat doesn't beginning to last kind there but what on guidance first year half of half thought guidance,

be will it assuming to know this So is are little guys you safe and federal very to it playing aid safe that there year. assume that are

help even could are government on And so there? last just have kind be but of upside guys kind do our expected, of about the level guide what those the what of than slower baked estimate, you think in therefore three for aid quarters has us expecting, you or come

Joaquin Castrillo

And of what Look, out has and that the went seeing of what out of the expectation kind and on and with comfortable today, were we and in we expecting are terms with anecdotally, a in here putting the in higher when coming actually we're to guidance and we What government the beginning we're the and timing quarter. of had we what we to the we're stay that's amount end that have are of can remainder just expecting terms the aid what first year, and can't good year, why of call news of what here this obviously, the fundings confident I island range. there obviously, specifics perform. get able the that in, the say in out seeing we our internally, of into we I throughout considerable, we we're what are how

John Davis

just looks there, Okay. up? in a going it's And any you look what -- then, the balance part It sheet Maybe Latin on the America. you deals public are Mac, like company. is think things would are seems shape been just environment as curious make the maybe environment environment maybe pricing like and M&A out best for commentary think ever sense? forward, there definitely of what's I your it's like the just in seeing M&A What's coming the strategy

Mac Schuessler

that see M&A, the we pretty program. the Yes, can actually share our you well on get sheet. in John, agree repurchase we're balance quarter, with as would Again, we And was I see very opportunities happy the sizable very, transactions The valuation I few actively of looking big between. We've and we're always opportunities. far at said that material, and which past are the in our the type at those think opportunities. right at continue would one market, of We they're we in about to a bolt-on important do that of still And And markets, a now. additional are but investment product product then love symbiotic. to that $X.X on new part products billion, very we're our today, looking we very but potentially have focus. unlocking but focused can that still we set it's we like feel use still great

John Davis

potential for and Rico. has just And Puerto be to Rico where to in still or early opportunity much markets going to lastly, of successful. it that Puerto take ATH is pretty or just the Any other -- been today, that's outside fairly was -- days already can take LatAm Movil any expand Okay. you then exist that something you Movil ATH that and pvot, but in

Mac Schuessler

say is we're I particularly pvot across I so product of America, is type help focused Latin product. product mean, on, think ex-Brazil, of incredible. it's with would different we very, a very can you in other markets most that definitely the it sort go markets, when that because is us a What

America. think South across we we and pitch is it for So a to us, when America differentiator banks Central

would that ATH a export can a network it's and our So Movil, On to bit core thesis we that that be that. it's ATH in different product.

you and the technology, we've and bank successful, level get that debit adoption our it strategy product need. high we a reasons scale love been that's love of network we of but the of we the So think big to and participation sort the also requires one

but interested, a have So, complicated we that that it's interested, product clients we much have are more export. banks are

export more Rico So one coming pvot likely years. Puerto the is the probably be of able outside that's we'd in to

John Davis

in pvot, launches the giving improvement in early Puerto without how on Rico? many attrition of details the from and Okay, early product any too on any type impacts signpost Rico gone Puerto

Mac Schuessler

in those Yes, have found We very lot we I of a don't saw market, again, type this that, pipeline. we a of healthy solutions. mean,

now, some we've out that's that we early or features Right is merchants small those. and one have island. functionality against had the We on broader compete But we've capabilities and novel the different competitive we from that the two takeaways it the for mostly verticals. because build as have, retailers, indication for to we out rolled

the it can of product sort for or of -- thing believe because small. consultation are we helping is type second in we is really of that them is restaurants are that bakers and the their we tend these fully. integrate do it or and more is, technology automate think most expand capabilities, merchants install different have They networks musicians to So one, to Again, local ability into service be complicated. we can with the the local these person. And this provide, we business benefit very and We capabilities. big local

the are on optimistic product. still So we very

John Davis

All guys. right. Okay. Thanks,

Mac Schuessler

you. Thank

Operator

no session. concludes over there the Schuessler for closing back are in I questions this the As would further question-and-answer turn Instructions] remarks. like to our to Mac queue, [Operator conference any

Mac Schuessler

attend across your again Kay I everyone and and the So, road seeing support. look on guys you for call, to country. conferences for we forward Thank you. want Joaquin thank joining to different the thanks the as

Operator

now The is Thank attending presentation. for concluded. conference you today's

You may now disconnect.

EVERTEC (EVTC) 3 May 192019 Q1 Earnings call transcript