EVTC - Earnings call transcript Q2 2022

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Operator

Good afternoon, everyone, and welcome to the EVERTEC Second Quarter 2022 Earnings Conference Call. Today's conference call is being recorded. At this time, I would now like to turn the call over to Mr. Kevin Hunt of Investor Relations. Please go ahead.

Kevin Hunt

afternoon. good and you, Thank With me Executive Officer. President Chief Schuessler, are and Joaquin Mac Officer; Financial our Castrillo, and today our Chief [Operator Instructions]. I'll Mac. the over now call hand to

Mac Schuessler

everyone. Thanks, good Kevin, afternoon, and

we'll Popular million a was to second of details review the results adjusted it were approximately Total are acquisition to organic the on the completion. increase from of previously approximately million, quarter to on of BBR prior X, in who Popular driven We in X%; X% and start both benefit approximately our the XX% quarter, $X.XX, share year $XXX strong the the transactions Puerto volumes On transaction from XXXX. a tirelessly with July Adjusted increased an the quarter, on growth. announced will decrease I earnings also revenue transactional I close benefited with was line and outlook. Slide was second to revenue worked four. our Beginning call, while these from and get who want with second onetime whole $XX by to both further Rico of quarter our some per turn timing, the today's revenue able and expected results, and highlights pleased to and EBITDA a compared an to second Puerto decrease of quarter. update LatAm thank to transaction will impact from provide team our for then over from transaction We Rico growth. and quarter LatAm continues the Joaquin,

an compared million returned approximately to share dividends shareholders prior year. million with when During $XX and of our the quarter, increase through the $XX we repurchases,

as million liquidity June $XXX XX. our remains strong at of Additionally,

heavily quarter sales in our expectations. not the when on stimulus that in year's the with second impacted with did Acquiring Puerto period, slightly our line Rico Slide repeat Last ago lower compared resulting increased volume to year by update was COVID Merchant during revenue five. a in and Moving current quarter.

issuing offset continued able Medicare payments The Puerto Rico. to Puerto beginning POS as up quarter care were tuck-in as acquisition from Movil Rico also an at year-over-year and growth well increased small Business for ATH us for select X% to in from we and services in transaction pricing However, Payments strong headwind services volumes, process the this health benefited providers government Puerto - Rico. in a segment that of ATH actions. from completed benefited the increase with allows

will these to We demonstrates government the willingness execute expect for towards growth continue our payments. further digital balance commitment its arise. opportunities when to grow and and shifts continues use to sheet This as through acquisitions modernize to our services our

Business Our Revenue Republic. calls well increased Solutions benefited from the quarter Dominican contract revenue the as from in year-over-year. approximately the on printing onetime prior as X% sales segment in software contribution discussed

the and closed. third We that in in transaction to clause also in be benefited with the our Popular, Popular X% will quarter services is higher from certain volumes MSA credited which CPI now the

XX% lowest on Finally, years. and the XX The rate macro over up to to in Rico up from X.X% down X.X% in a in Puerto comments is rates X.X% continues tourism high. year-over-year dropped in has overall few finally, Rico. at to of travel The this unemployment economic the XXXX, six-year continues with average XXXX. index the activity from a Puerto April in rate And to environment XX%, month XXXX, hotel in higher, in unemployment trend recover occupancy and

challenges, we strengthening of economic continued are from the Rico broader not will we benefit shielded macroeconomic Puerto we the expect So from environment. that even though

XX% compared prior nearly on America Latin year. was Slide LatAm to Turning to the now six. up revenue

continue organic pipeline of from We customer new with healthy existing our a opportunities. experience to strong growth base

presence entered like few had We in where have we more many for the where countries years have into we years, calling in out Costa continue the growth off aggressively growth Rica grow past compared Mexico. worth with when to a in while countries as countries. smaller LatAm to of in Mexico and very Chile is double-digit some other such accelerating our base a albeit high quarter,

to Next, a cover seven Slide to let's items. few additional turn

strengthen are our the have Popular transaction Popular X. over hard worked on closed to the pleased years. relationship We very July We with to

excited that for business extended Acquiring look We EVERTEC bank Recall to strategic our we our XXXX, with extended a was the we master through contract with modified ATH for and network growing the extended years are bank. and agreement Merchant agreement the Popular through and service customer We forward future, that through will many our XXXX. remain into XXXX. our

to our allows assets the Popular and don't for We products them resets to will long-term grow completion have no Company that we transaction this Holding the longer resources initiatives a The into be are the X, our On from used impacts their flexibility the capabilities of by with and and organization in acquisition over some Joaquin transaction it provide segments. align creates I strength. allowing align of expands on some now areas and purposes changes at Joaquin organizational on need grow us with our a to experience with the also we XXXX. connection we are more that Peru. team's second made segment our Popular, sold our minutes. an our payments that, entry of Bank July for Popular will look will Latin will of we also our strengthening aspects as Chile our to solely results. them second quarter these BBR of BBR provides transactions, forward as to In half focus strategy, certain well Rico a other growth of our from to our We EVERTEC executive forward to leveraging our other a in-depth and look revisit few that the increased which closing Act, back to look business, strategy. turn in relationship in with once different the to particularly that that of pleased in of subsidiary have business long-term partnership customer have closed to We conform to With better Puerto to America. high-growth us contribution on front,

Joaquin Castrillo

you, Thank afternoon, good and Mac, everyone.

X, compared you to see approximately second revenue million Slide second consolidated X% $XXX.X for EVERTEC. million, year. quarter the the to up Turning was prior in $XXX.X for results Total will quarter the

increased transaction volume Rico as well reflected ATH contribution quarter Movil as completed Business and tuck-in growth the of the the continued this Puerto Second payment from results quarter. acquisitions ATH in and

that which amended the printing software Mac close the has was XXXX, noted signed been in from in sales of We our June the now on effects on Popular escalator onetime CPI also benefited with X% MSA, of contract transaction the X. the July

year. as XXX in inflationary continue the operating expected prior year. Latin reflecting loss exchange in for multiyear EBITDA million, to of approximately we the higher Adjusted as to well is XX.X%, quarter, XX% by and quarter losses prior existing higher margin the depreciation the to $X.X lower basis for part and currency the increased prior We in mainly software adjusted The foreign in of quarter prior the mix Adjusted as driven amortization. growth, quarter approximately growth in for EBITDA year gains in to quarter $XX.X a due as the a X% continue a was losses as decline approximately million, decrease development, EBITDA million a primarily expenses net recorded our $X.X certain relationships approximately the grow to provisions rate America, the $XX.X with higher point double-digit an changes of the approximately well $XX compared experience income year, of the and of in countries. $XXX,XXX impacts. tax compared for was well million million and was decrease business to in organic presence as operating compared decrease from expand Adjusted due in margin impairment as

Our adjusted in in these jurisdictions Rico. mix grow the shift continue higher Puerto expected rates experienced the effective we than and tax to was LatAm business rate quarter and a XX% in as in of at approximately higher in

tax As compared full we for of the prior our Adjusted to to year compared now prior XX% a to a XX% EPS quarter, expect year. the expectation for XX%. rate of XX% the to result, to the approximately $X.XX range XX% from was decrease

with with approximately now by increased prior as positively that results. our X.X%, cover approximately I'll starting quarter, given year results, second Acquiring. directionally year-over-year segment ticket down which from expectations. net Slide year the year-over-year average revenue X.X%, was benefits Merchant stimulus In the on million tough $XX.X Sales comparable our Acquiring to the and Merchant Moving a slightly period are presented to aligned impacted declined volume last our XX. COVID-related

spread grew the the and driven of sales operating segment mitigate mainly these We expenses, XXX Adjusted ATH transactions. increased costs overall and volumes able higher as for for driven ATH certain margin and million, the down mix lower-margin was Slide transaction continue spread points second approximately XX.X%, Adjusted such mainly XX%. Caribbean XX, experienced segment $XX.X by in see last driven Business was of quarter approximately EBITDA POS basis sales grew pricing results Revenue you segment. was million, in Our our higher to higher as gas year-over-year also lower portfolio which XX%, retailers as volume the Movil, and X% the changes to we On such by Services stations verticals in compared for grow. primarily in as for as by volume driven year-over-year year, higher verticals will initiatives processing were volumes by began Puerto earlier Rico which that EBITDA $XX.X processing, to approximately Payment through volumes down reflecting up XX%, the was year. in headwinds the down utilities. implementation

care benefited Puerto transaction also Payment our health from provided increased from America the and monitoring Rico Services services volumes in to from We benefit issuing increases for project segment. continue services to and Latin and in transaction companies processing revenues

attributable segment XX% the base was the for countries prior these this customer the Adjusted Slide inroads in have XX, be see customers was payments. to are we Organic Of the to Costa Payment compared million, as approximately as compared in our year. up as points existing last Mexico, as the was as Services completed while have results I operating to XX.X%, EBITDA contributed the XXX referred million, manner. year. LatAm we Revenue the strong the the more software well growth of island, payments stated close delivered to us year-over-year XX% acquisition contributed revenue customer will Adjusted last was primary and approximately second Mexico to to cash over in to which, all further Chile a basis growth, EBITDA On in to due as growth, compared down existing highlighted, expenses. impairment our wins over earlier in quarter last that you up charge XX% was the a of significant higher has driver XX% primarily segment in Mac that with As for segment. year. increasing estimated slightly as for year, as segment announced address to have quarter. to small growth $XX.X approximately during the past, the begun from contribute Rica, margin particular, the to in and we well gives quarter XX% this $XX.X

Solutions $X.X with We it for adjusted in provides are EBITDA and Business second On million higher you seeing contract Slide the off. the are million, costs our approximately the down as strategies the growth XX Adjusted growth we losses. in we our we paying these further $X EBITDA one X% countries pleased the Republic, $XX.X margin was will that the are compared that was decrease evidence XX.X%, for benefit segment Solutions very is a to June quarter bank of printing benefited find approximately in versus reflected for the personnel year, a last X% and benefit approximately slight XX, the higher also FX last software for approximately to as provisions $X.X prior MSA and million. sales in the volumes CPI in million lower as benefited Popular, expected revenue $X.X The were Business approximately results year. of began was from $XXX,XXX in up with million driven from as by increased the of segment. core current Dominican margin period. loss approximately amounting also year points percentage in escalator to banking There services, remeasurement

accumulated in As with quarter. July This we X, our the results amended third on reverse transaction the now the a with XXXX. have MSA will occur October of will a of Popular credit effectively which that since recognized close Popular was of reminder, escalator the the in CPI impact credit

For the business. $XX.X losses quarter, down basis last was the effects, in provisions result related points and XX.X%, inflationary increase million adjusted The XXX year. EBITDA adjusted sales printing increase approximately as for costs was adjusted EBITDA cost of margin directly EBITDA decrease margin compared higher related by expected in was of of driven to an mix to and a

to on XX. Moving Slide

a Corporate and will of You summary see Other.

for a higher adjusted adjusted Our and than was million, second revenue year line our EBITDA in expectations EBITDA of our as prior approximately but quarter $X.X X.X%, was negative XXXX. percentage total with

flow our to on Moving XX. on Slide overview cash

approximately debt was BBR $XX $XXX part upon were balance nearly which close of resulted cash million. operating close period year-to-date approximately compared X-month expenditures transaction. million was million contractual on million $X paid provided million, repurchased to in the cash share-based beginning in increase approximately shares Net Capital by including common stock the which million, for of $XXX were $XX approximately restricted a We the to decrease $XX million. prior million and Rico million, pay cash were year. payments, of July million. certificates XXXX withholding $XX and and dividends X. approximately million, deposit approximately of cost approximately total customer approximately cash other of $X.X $X debt we activities million Our continue recognize certificates transferred paid year. approximately of downs, XXX,XXX total of Puerto a in taxes relationship $XX.X We approximately million mentioned the debt on the deposit requirement of full and long-term the million purchased connection previously net $XX We capex of with compensation of acquisition $XX a for $XX to to sellers These for $X for of a anticipate approximately

use transaction We X.X we the beginning future of stock on under also our repurchase and that company's have highlight reduce our approximately in received will quarter. from $XXX X, connection million share approximately for million in Popular total I with share Popular would count third close, available shares July program. this the the

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

XX. Slide Moving to

as XXXX. find a You of XX, will summary of debt June our

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

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

trailing Our times. net EBITDA debt adjusted was approximately to X.X XX-month

As of capacity cash excludes This approximately our includes and revolver. June million. XX, available restricted total borrowing balance liquidity $XXX under the was

July some will all effects I that of date. financial from XX. Slide to revisit Turning that Popular on making effective closed the contract of transaction the XXXX, on extensions X, highlights

focus XXXX align Caribbean. as reminder, that innovation in expand we on our month together Popular share our and our segment through will incremental a and July share interest and with will begin As the incorporated we reset revenue the have our better agreement Puerto the that Merchant revenue to This will margin work to Acquiring ISO in mid-XXs payments to a going expense of low our share in will an the provision range extended and of represent forward. segment for Rico

through with one XXXX. and its Popular strengthening with through and of XXXX, ATH in form Puerto amended MSA payment Rico with We also extended our issuer our Popular have agreement the extended number largest

approximately million, period October segment. be Solutions which As of will cumulative for crediting extension, $X have X% amounts the impacting XXXX, X, that to the now impact the part CPI on Business the mostly in retroactively the commenced QX, CPI we XXXX-XXXX of conceded and

on reduced through working the from X.X% minimums Additionally, in we both to XXXX, have and cap of aligning through CPI X% the XXXX services together interests future. MSA introduced into our

consolidated year-over-year and We that to a low represent basis. going an these generate revenue we low margin and $XX margin will normalized also that range Solutions back reset annualized margins go-forward on to on impacts, starting a QX certain the will Popular will revenues forward. in sold in overall XXs on Business to basis basis negative an in normalized our assets expect to result in approximately million a All impact mid-XXs the

now update XX. outlook. with to you will our Moving I an provide XXXX Slide on

While quarter, been onetime some strong sold; for and are target. in we expected America, second Rico Puerto popular within not the the in a the that strength revenue the to revenue now by came pleased with which said, software of repeat the have progress volume second will half. upside solid businesses are portion be CPI that some impact, reversed; allows this Latin sales and and from are increasing we encouraged in trends That our from

to to of from results, representing still million target XX% growth second expect the the EBITDA a we This up XX%. margin XXXX, $XXX of to charges is million $XXX between For $XXX year be to million. quarter prior expect now to revenue X%. for we to that impacted of Despite full X% million, some in of range be our $XXX range

be a we XXXX. accelerate environment, As to higher two interest rate given earlier, rate into mindful are And noted might Please we also slightly the expecting higher expense. trends tax of rising that expecting now are these XX%. XX%

This mentioned maintaining to outlook adjusted share and share earnings $X.XX XXXX per earnings a adjusted for per earnings the the considers transaction to basis, Popular full $X.XX compared above. share of year-over-year our from to X% of as are to between anticipated be in impact represents decline the per $X.XX year. X% We $X.XX GAAP is of On a the $X.XX. to

contributions our the from well segment we acquisition discussed as our from assuming the the Puerto both half in in back Puerto the impacts highlighted year, earlier segment and Popular the acquisition as transaction are Payment above. Rico LatAm the we Rico Regarding of BBR

For see high we year our single-digit low to to and growth headwinds payments to outlook, reset our tough XXs payments to segment low expect America - as Solutions. grow teens a the we some Rico Business segment Mid- high mid- from high to and prior continue in in - Latin Caribbean, digits Acquiring comparables full to Puerto single-digit year. in to the Merchant continue mid-single in

related transaction. and the Finally, first occurred the in the X.X the delighted both look with to repurchases forward months. also approximately BBR have for are share are questions. results the upcoming in the person pleased XXXX the hopefully transaction count the in of July Popular in closed half you and Popular million and acquisition. half share that from open the guidance we line to includes ahead please this one benefit Operator, conferences first our We reduction in the seeing and at to In summary, on go later coming

Operator

And comes ahead. first our William Please Instructions] from Bob [Operator question of Napoli go Blair.

Bob Napoli

you. going Than on A lot there.

- long I we'll and to full of, margin being would quarter. the the one-offs think, quarter in a is So a corporate have We effect. what mid-XXs number term. There of were so quarter talking that your low the over second be EBITDA you're had that is about maybe that the transaction BPOP expect in in second this some to the margin effect EBITDA

Joaquin Castrillo

Bob, this is Joaquin.

any the second the impact quarter and in -- mean second you think the I of not does half have

Bob Napoli

In meant quarter, the third third quarter. I

Joaquin Castrillo

Yes, the yes, quarter. in third

consideration the effects is margin The of a basis, So the low back. the taking different start to let - me XX the so transaction. from - on the XX% mid-XXs third into quarter go-forward

retroactive CPI impact we will a related is have though, will a be, onetime to this As the it let's say, amount. mentioned, third because credit quarter that

Bob Napoli

is Okay. What amount? credit? What is the CPI the

Joaquin Castrillo

million. $X About

Bob Napoli

million? $X

Joaquin Castrillo

Yes.

Bob Napoli

the your And that's built into for year. guidance full

Joaquin Castrillo

guidance for correct. into It the our year. That's is full built

Mac Schuessler

from the credit Because of end first very that's the half this get that. and year a uplift back year. of to They last a CPI

- that - won't of see that at quarter, during So we until you beginning. closed we given the - QX closed or but end the QX

Bob Napoli

with their strength, down mean, Popular their call, on looking sell they're just And to sheet has and the your Banco I balance position. said

the to I you think ownership. great why X% Popular? from just Banco shares buy from XX% such in to take With wouldn't balance sheet their agreement it is shape, your

Joaquin Castrillo

on I us, in capital our repurchases. have So and strategy. to Obviously, M&A we'll extent the we that be think Bob, allocation we'd consistent, of certainly don't front growth consider

on something And we'll consider based it's so conditions. market that

Mac Schuessler

Yes.

at We Mac. appropriate us this we the is their from because though deploy pursue M&A this an pricing, will free Bob, participating to depending as well. sell-down. though, capability, their to we capital thesis as mean I part sure of on will that But So the was the do Company to want up Act. in the make continue look transaction consider, of we Holding Bank to opportunity to sell-down definitely definitely have

Bob Napoli

in was question line. last And that

the Latin America Given lift well. reduction be doing - of to restrictions, seems

opportunities particular, on where is to know out your seeing, strength. So How interest seeing doing? you're to I and and maybe and Latin commentary Chile what Mexico. just some add you in called America you're

Mac Schuessler

Yes.

our the are businesses well. Chile expectations. performed well. have performing and exceeded So sort of Mexico Both We've

double As job, know, I get you pushed the grew for I to got XX% in Latin the first hard to quarter, when Bob, which, me you America, got digit. we really

And with and so we're we that. are, pleased

Puerto focused that M&A. region. not complements We still are the still deal transaction Rico in Popular closing closing looking on our is announced payments of the small and throughout still in a the of deal as BBR, the also tuck-in but only here. well the which business Chile, there's We We're

Bob Napoli

appreciate you, it. Thank

Mac Schuessler

Bob. Thanks

Operator

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

Vasu Govil

taking questions. for thanks Hi, my

you The first change all there for competitors for that? announcement related high-level on M&A competitive your Are in one to the big at one the Mac, that dynamics Does of region? you, thoughts Chile. any in

Mac Schuessler

a whether been well it's look, landscape, leaders able our Yes, perform change feel of around or the like know and two of focused both. great in competitive I mean, the What companies. environment, good always those on of is, us. intently on in say to would a and that pandemic we very changes we've the change I the look, the hurricane or regardless question. some regardless organizations customers I

doesn't and competitive local being that. we Latin that markets player, this value think a and still think change we very have American we for proposition these So a

Vasu Govil

helpful. quick ones Joaquin. modeling then And That's for two

on interest next any expense, interest we calibrate for can higher between... the that First, color burden year how higher

Joaquin Castrillo

on what - tell at the total It's debt. you slightly a mitigate our outstanding would I swap helps interest lift. that do of structure, we - look of capital right, mean I portion our have you, a if our above Vasu, XX% us above

gives bit of forward. more increases a kind as you our little how those that color to is to capital of So going structure much subject

Vasu Govil

Got it. pricing I'm on not just And about, then last about the if think we talked the you've heard quarter was initiatives that first I mistaken.

So do we expect as from well? year them to lap we in the some the fourth see next in quarter? Or benefit do those

Joaquin Castrillo

So something this as we said we've I continuously. do before, think Vasu, is that

those in I want think of we than strategic we've in some to execute going headwinds a continue evaluate we bit that where impactful that how cases, initiatives the But and that pricing tough price the saw been thought very some oriented of be when we'll because We they on evaluate portfolio that's we comps little the how very and might to and detailed prudent, initiatives. of those more some others. given forward. were these of terms year last

Vasu Govil

you much. very Thank

Mac Schuessler

Vasun. Thanks

Operator

Please Our next of question go James. ahead. Davis from is Raymond John

John Davis

to down wage Hi, your Joaquin, of with in larger transaction. I U.S. there's a But touch seen guys. a of for on you've margins margins good second. pieces pressures. a want the and talk on BPOP other moving Obviously, inflation lot afternoon the the peers lot

at down inflation just Just there. Obviously, you of the - post are pressures similar seeing on low said kind mid-XX you even to come all know little So bit? on expectations a I range wages those comment your curious transaction. within others? and curious, margins Has

Joaquin Castrillo

wage we're have others. talking I is we've specifically, we're about that mean tell increases. a that say in - and Latin where I inflation, pockets think wage technology that What from resources, more you some America and perspective, I are the through little seeing John. yes, and past, in there bit we competition say a would I said seeing are than of would wage I when specific this we to reacted can that

transaction knew our on Popular to some focused. even But put basis. growing on time we a of revenue when we'll margin increase segment. side a over announced America, stated that we much partly from it. to was margin cost our the go-forward we're going and very perspective margins, certain transaction are on that perspective mid-XXs able been Latin try expectation levers though and as the execute lowest from maintain pressure to continue to we We which We margin originally, maintain in is low a our We've have to that and that

Mac Schuessler

I important one I of the with then MAB. John, we the sold Well, businesses think transaction them we're giving is, that mean, that's margins share the on thing because down and brought that Popular

talent new on have of own we focused develop our market, key growth. can programmers property unique but look the and intellectual mean, have retain our items Puerto at business, As recruit that paper you are products ensuring relates for very to our the and particularly like Rico, and these that's not to it to we've for critical discrete because seen region of pipeline in we our guidance our pressure as huge. think printing labor And on outside year, I the we costs where have inflation is also been development we seen in the we

are markets to So low-cost been that fortunate begin we've with. those

been the where to it way, So significant for we've in able year. and margin it is guidance is. That's upset increases that a ways. expectations made, we've really in hasn't why that's - why offset other the the our And

John Davis

now for you been balance significant less to kind pipeline closed curious, like, just impacts obviously, about a or great worried M&A Okay. there? you earlier. there the a on Has ago. that pipeline, bank little Bob's increase bigger? holding any And aspect? they're gotten of bit of in then parties about questions sheet's Any to transaction Obviously, follow-up month your your one BPOP talk in a Or reason. are willing the because a did Obviously, Has shape. comments company guys this

Mac Schuessler

equity Yes. right markets, do in unusual think after. as we I I is of going to take. to and mean this both go the right, the what can It of targets now is universe are credit types open sellers an that time far willing as up

think work M&A, year to the very focused for But valuations. more I what got are on is us. opportunities some think has that to we are create going do and this through fair So we new

John Davis

appreciate all color. right, guys. Thanks Okay, the

Operator

And Faucette from Please James next ahead. Stanley. Morgan our comes of question go

Jeff Goldstein

James. actually is on for Goldstein Jeff This

specifically more through, what your partnerships think thinking should Is federal should we think about order coming funding kind How case, could top about for point to here. the forecast to Is you your that back Puerto way about faster Just the making second Just how its guidance of the in that the at drive more in half Rico? tourism it line? we upside had rank closed? this upside them? pipeline if maybe on

Joaquin Castrillo

would more transactionally payments quarter, Movil look right, few Rico. we anything, Merchant So ATH pieces it but come - we a This say be, we ticket. certainly the Acquiring to specific our in that really. some at had we segment, see shifts so QX that I moving good If really Puerto flattish, is it's saw in network that still extent we perspective would average growth than that strong and had we very as that to pretty continue through lower start from to transactional originally say exceeded we see see to for - to the merchant what we segment. to And and reason QX, I expected our continue ATH a

our of credit spread. pressure credit - putting volume debit on We that are continue more to than volume out see

if in higher what start that two actually transactional according range. then of segment, continuing we've are in guidance of you need could payment to said to volume Acquiring to our look combine. end mid-single-digit puts, Acquiring move At Merchant that growth the Merchant way, Merchant right? and in some at half, and trends those those towards single-digit say, a on full our the low we're push for us if year, point, So we low expecting of to the network the our kind good But see this second which Acquiring growth

Jeff Goldstein

improve e-commerce think a you a follow-up on in And question percentage just how mix. of your Can that let's But Okay. is that solidifying fairly to do five say, the your the much, then Got of it. about new focus opportunity some Or long-term say, four of know much geographies? I e-commerce. over is products less there? core a for materially next, you years? than, low

Joaquin Castrillo

launched to that product an a didn't our us. have we've that a made most Rico. We've would I presence. And markets product marquee it we back of We from to it's XXXX. incredibly have just almost e-commerce called access acquired perspective. good from the a e-commerce company important immediate We such in clients where now reactions in gateway, say Puerto our on PlacetoPay seen

I our that also products say e-commerce would if Mac, continue is I do us solidifying know and important, but we and our you... in then the is future. that gateway will think clients don't growth this bringing helping So certainly into that incremental

Mac Schuessler

we most of it's of now Yes, - we're It's seeing let and Joaquin's our made recently, and me with Joaquin. the Head e-commerce the PlacetoPay of out to where I we the continue a in mean the agree just do little of had several uplift America, We then we Group - that of change. incremental - he will business. part months, several [indiscernible] us coming about with That's change around that markets is for an a the the are think I we to And actually - markets to big bit organizational in in talked we've Latin number we've Rico. an of that manage e-commerce. one of I Puerto organizational part business is the for localized been And Medine. it's customers future. now reasons comments, bought

as as customers it, offering can term using merchants continue continue we the an that that to capability may keeping be more which more looking to have regional compelling for that on adding potentially it countries and even that discrete localized. we localize long more the really business be we're to focus a a so offering, So will

a So us focus it will for forward. going be

Jeff Goldstein

helpful. Great, Thank all very you.

Mac Schuessler

Thanks.

Operator

come [Operator Friedman Instructions] Next will Jamie go question ahead. from Susquehanna. of Please

Jamie Friedman

And rate. Puerto the Rican Hi around we your the to that down you unemployment do Joaquin, Mac, as It's which segments? Hi remarks, if the X%. mentioned for implications in prepared so, business? interpret How

Mac Schuessler

Yes.

mean funds from coming from about Rico dollars pandemic. think and you I the Maria in So have year some future, we and coming still significant the incremental into when Puerto in this

merchants discretionary to to economy, activity to people the putting funds our actually stimulate beneficial they very the at business. to helping our continuing customer, our ATH spend to have work, have that and making So Popular, sure in spending largest using is network, our

nice the is given good and business for on consumer a economy an is with of a good has unemployment spending. lot in driven having that tailwinds it discretionary So that and federal funding come by our standards rate historical

Jamie Friedman

think was were just Puerto housekeeping services charge. software the And payments In - about? was kind I sense. Makes and of around and a What then Yes. had one thing. you Caribbean, there impairment making point, Rico that I

Joaquin Castrillo

that an No, this margins that the quarter we took for specific impacted impairment segment.

here, had software customization a multiyear impairment. that say a as project significant have result we the And of to evaluation we that of it. done asset, to we've Let's record

Jamie Friedman

is business? that's to or part Okay. worry anything the there I about just mean of

Joaquin Castrillo

to future - were we item. impact. onetime expecting No, is a not this any have this not We're expecting

Jamie Friedman

Got it.

Okay. Thank queue. you, I'll drop back the in

Operator

appears this [Operator over concludes I'd it questions. closing no our Mr. Schuessler go back further any question-and-answer conference This Instructions] Mac have turn to remarks. like ahead. Please to we At for the time, now that session.

Mac Schuessler

Thank I thank seeing forward us Thank we to tonight, and at of to call future look in the on each operator. the joining want you conferences. for you. you you,

Operator

Conference today's attending concluded. for has now you presentation. Thank

You may now disconnect.

EVERTEC (EVTC) 7 Aug 222022 Q2 Earnings call transcript